Football Management

Commentary on the management of over 160 English football clubs by Dr John Beech, winner of the FSF Writer of the Year Award 2009/10 Twitter: @JohnBeech Curator of! Football Finance

Archive for the ‘Resurrection’ Category

Round-up of Season 2011/12

Posted by John Beech on September 8, 2012

The 2011/12 season has been characterised by long-running sagas.  Normally I find myself in an annual review recounting a series of relatively self-contained accounts of the woes which have beset a number of clubs, but many of those listed below are far from resolved scenarios.

The selection is not systematic – it consists of the clubs who have found themselves on my radar screen; further suggestions are welcomed.

Ashford Town
For a club to have its two co-owners feuding (1) was always likely to lead to tears before bed-time.  Add to this a withdrawal from its league in 2010 (2) and there is a clear downward pattern.  This July HMRC issued a winding-up petition  (3).

Billingham Town
A long dispute with Hartlepool over who should pay for improvements to the Billingham stadium (4) had been resolved in December 2010, but in January this year Billingham sought to wind themselves up (5).  However, HMRC then stepped in with their own winding-up petition (6).  The former of the these two seems to have been granted in April (7), but nonetheless the club is still is playing.  Any insight into what has happened would be much appreciated.

Coventry City
Coventry City have faced financial problems since their relegation from the Premier League in 2001, not least because of the development of the Ricoh Arena, a less ambitious materialisation of what had originally been called Arena 2000, originally designed with a retractable roof and a removable pitch (8).  In 2007, in a moment of financial crisis with the club having announced its intention to go into Administration, it was bought by venture capitalists SISU.  Since then SISU has failed to inject enough money to buy back the Rich from the local council and a local charity.
SISU have struggled to find the right balance between economising and maintaining team performance, thus causing complaints from fans.  The financial struggle led to SISU stopping paying the rent for the stadium in April this year in an attempt to force a lower a rental.  The confrontation was resolved in court last month, but details have not been made public (9).

Croydon Athletic
The imprisonment of owner Mazher Majeed for his part in cricket’s ‘spot-fixing scandal’ last November (10) made the club unsustainable.  It was promptly fined and deducted 10 points (11), adding another straw to an already broken back.  Unable to find a new owner, the club withdrew from the Isthmian League, unable to fulfil its fixtures (12).  A resurrection club, AFC Croydon Athletic, has been formed however (13).

A sorry tale of desperation and despair, covered in postings passim and on the TwoHundredPerCent website, but eventually one of hope.  In early May fans group Darlington 1883 finally succeeded in taking over the club (14), but at what a price – the club had been forced into exile (15 and 16), and demoted to the Northern League Division 1 (17).  Onwards and upwards!

Harlow Town
Another sorry tale, this time tied up with the owners’ divorce (18 and 19; note the dates).  The club entered a CVA back in September 2009 (20).  Last November the club faced a winding-up order from HMRC (21), but this was finally dismissed in February.  In the same month, new owners had taken over (22).  Any further insight from local readers would be appreciated.

Kettering Town
Not the ultimate car crash – that comes lower down the posting – but certainly one of the most dragged cases.  See postings passim and on the TwoHundredPerCent website.  The season just finished was yet another traumatic one.
Having started the season by going into exile at the former Rushden & Diamonds stadium in Irthlingborough, less than ten miles away, there seems to have been no synergy in attracting new fans, as is reflected in the appearance of fan-owned AFC Rushden & Diamonds, also in exile, at Wellingborough, ground-sharing with Wellingborough Town, less than five miles from Irthlingborough.
Debts built up, and in June the club had to enter a CVA, with debts reported to be £1.2m (23), and HMRC hot on the club’s heels (24).
Meanwhile, want-away owner Imran Ladak had handed over the reins to ‘acting Chairman’ George Rolls, at least, until he was suspended from football for five years by the FA (25).  Ritchie Jeunne took over as Chairman (26), albeit extremely briefly, and now, in a Chainraiesque twist, Ladak is back (27).  The long-suffering Poppies Trust continue to fight on doggedly (28) notwithstanding demotion and a 10 points penalty (29).

Chased over debts by HMRC and then Barclays (30), the Welsh Premier League club was wound up at the end of May (31).

Northwich Victoria
Another depressing season for the clubs’ fans – evicted from their stadium (32), and then a crazy saga about where they could and couldn’t play (33), and expulsion from the Northern Premier League (34).  You couldn’t make it up.

Plymouth Argyle
It seems some time ago now, but the final chapter in the club’s survival was last October, and so within last season.  Mark Murphy has a neat summary of events here.

Port Vale
Yet another long-running saga – see postings passimandTwoHundredPerCentfor details.  Notable events and non-events during the 2011/12 season were the appointment of an Administrator in March (35), the lack of an attempt to take over by long-time suitor Mo Chaudry (36) and the Administrator’s misplaced faith in Keith Ryder as a potential owner (37).

Here we go yet again.  The ‘club as company’ has been, more or less continuously, the basket case of English football for the past four decades, and this last season has proved no exception, with the arrest of the latest owners in November (38) and a now familiar drop into Administration in February.  I’m going to hold back in my lengthier comments for the moment as we seem to be on the point of either the start of a new chapter in the saga or dénouement.
Suffice it to say, in the red corner is Balram Chainrai, threatening to ‘save the club again’.  To me this is a bit like ‘giving up smoking’ – you can’t logically apply the phrase on more than one occasion.  In the blue corner is the Pompey Supporters Trust (vested interest declared – I have made a pledge to buy shares, and would urge all Pompey fans to do likewise here)

Prescot Cables
In an act all too rare in English football, the supporter-owned club took the difficult but realistic decision to return to amateur status (39).

Rossendale United
Effectively defunct at the end of the previous season, the club still appeared on my radar screen.  In March the club was still being chased for £37,000 by HMRC (40).  In January the defunct stadium had been gutted by fire (41), and the next month the owner, Andrew Connolly, had announced plans to redevelop the site with 50 new houses (42).  This forced the abandonment of plans for a resurrection club (43)

Rothwell Town
Which is, by the way, five miles from Kettering and thirteen from Irthlingborough.  In May 2010 the club had withdrawn from the Southern League due to financial difficulties (44), and a mooted rescue did not materialise (45).  Last October the club went into Administration (46), and in March the ground was put up for sale (47).  As far as I can make out, there have been no further substantive developments – again any local input would be appreciated.

Stockport County
Yet another season of uncertainty for County (see postings passim and TwoHundredPerCent).  The end of a ground-sharing agreement for Edgeley Park  with Sale Sharks will have added to the financial pressures (48).

Truro City
An interesting case of amazing success on the pitch, driven by a ‘benefactor’, which has proved unsustainable (49).  The club has been pursued by HMRC (50), struggled to play its players (51), and at the start of the current season has had to seek protection through Administration (52).  Two mysteries remain – the involvement of the Salisbury City Chairman, William Harrison-Allison (53), and the sale of the ground (54).  The timing of the latter will guarantee that this story has legs.

The joker in this particular pack, destined to be an obscure name that only reappears occasionally in pub quizzes.  It marks an attempt by Steven Vaughan, he of Barrow, Chester and at one time allegedly Wrexham fame (see postings passim), through his son, to create a football club from scratch.  Originally to be called Widnes Town (55), it had to change its name on the not unreasonable grounds that Widens Town already existed (56).  Finding a ground to pay at proved challenging (57) and Stephen Vaughan seems to have opted to weave his own very particular brand of football magic in Malta instead (58).

Very roughly, the clubs involved fall into two groups.  First here are the League clubs.  Here there seems to be a continuing trend of slightly fewer clubs getting into financial difficulty, but those that do do so on a grand scale, and perhaps do so on a kind of cyclical basis – one crisis leads directly to the next one.

The second group, the non-League clubs, frequently display Benefactor  Withdrawal Syndrome (BWS).  The unsustainability of this business model becomes particularly problematic when the ‘benefactor’ has lifted the club up the pyramid to a level where his withdrawal makes survival especially difficult.  Clubs like Crawley Town and Fleetwood are surely vulnerable to BWS, not to mention the League and Premier League clubs of much longer standing who have become benefactor-dependent.

When I started preparing this posting, I did so with as close to a sense of cautious optimism as I manage.  With the natural exception of Portsmouth, surely things were beginning to look a little rosier in the football football finance garden.  Having completed it, I’ve fallen back to more usual mood of pessimism, wondering when club owners are going to get a grip and face reality (full marks to Prescot Cables as an exception).  Not that aren’t some good practice stories out there – Wrexham and Chester provide the most encouraging examples.

At least fifteen years ago I wondered ‘when the bubble was going to burst’.  This has obviously proved the wrong metaphor.  Suggestions for a more appropriate one are welcomed.

Posted in Benefactors, Debts, HMRC, Insolvency, Ownership, Resurrection, Trusts | Tagged: , , , , , , | Leave a Comment »

Round-up of insolvency events 2010/11

Posted by John Beech on August 27, 2011

Things looked slightly better than in the previous season in simple terms of the number of insolvency events I have logged – ten events involving nine clubs, compared to twelve events each at a different club in the previous season – although there were still some large clubs involved.  In 2009/10 we had seen Crystal Palace, Portsmouth, and Chester City crash financially; in 2010/11 it was the turn of Plymouth Argyle and Rushden & Diamonds, the latter disappearing and the fate of the former hanging on a knife-edge as I write (there is clearly no cause for celebration when a) no money has actually been paid, b) the Football League has yet to agree the Golden Share being passed on, and c) the prospective owner of the club is facing three charges of fraud at another football club in four weeks time (1 and postings passim)).

In alphabetical order the clubs in 2010/11 which suffered what I include in my definition of insolvency event were:

Atherstone Town  (Tier 8 )

The club had become dependent on the bank-rolling of Chairman Aidey Burr (2), who stood down in November 2009.  By December 2010 the club was forced to announce their intention to withdraw from the Southern League Division One Central (3).  They now play in the Midland Football Alliance.

Dawlish Town (Tier 9)

In March 2011 Chairman Dave Fenner stood down (4) because of work commitments.  In July the club withdrew from the Western League (5) with debts of £60,000 owed to landlord Teignbridge District Council and brewery Carlsberg Tetley.  The club faces a winding-up petition brought by the latter (6).

Eastwood Town  (Tier 6)

An unusual case.  The club has been on the rise since Rob Yung began a frenzy of financial doping, boasting “I personally pay the players’ wages and any other money that comes in from the fans through gate money and the like goes straight into the club” (7). No notion of Financial Fair Play there then.  The club’s rise has been impeded by stadium restrictions, and Yung put the club up for sale for £1 (hence its inclusion in the list) (8).  The good news is the club is debt free (but whether it is sustainable at its current level without Yung to feed its financial habit remains to be seen) and new owners are in place (9).

Gedling Town (x2)  (Tier 10)

Another case of benefactor withdrawal, but with more serious consequences.  Chairman Roly Ash had bankrolled the club for many years (10 and 11), but at the beginning of the season gave up, withdrawing the club from the East Midlands Counties Football League.  In November new club officials were announced (12) but in June the club again withdrew from the League (13).  A bizarre consequence is that each of the club’s players now has to pay the League £22 to cover the fine imposed on the defunct club!  It would seem that there is a Football Debtors Rule too.

Hucknall Town  (Tier 7)

Another oddity.  The club has had a recent history of financial struggling, and matters suddenly came to a head in May when it was hit with a £75,000 VAT bill by HMRC.  For a number of years, it emerged, the club had decided not to pay VAT on revenue items such as gate receipts (14).  With a hefty helping hand, a significant part was paid off and an agreement reached over the balance (15).  In the meantime the ownership structure has had to be drastically altered and the club has been forced back to amateur status (16).

Leyton  (Tier 7)

After a period of troubled ownership (17), the club (not to be confused with better known neighbours Leyton Orient) withdrew from the Isthmian League because it could not pay its subscription.  There was a mass exodus (18), and the club, London’s oldest, was formally dissolved in July (19).

Plymouth Argyle  (Tier 3)

An ongoing can of worms that I don’t propose to reopen in the context of this round-up.  I’ve covered the saga in postings passim, and it has been very well covered by twohundredpercent.

Rushden & Diamonds  (Tier 5)

The club went into Administration in July (20) and effectively folded.  Finances had gone from bad to worse since being taken over by Liam and Steve Beasant in December.  A number of rumoured last-minute rescues failed to materialise, and a resurrection club is now under way (21).  The club’s demise had a silver lining for Kettering, who, under pressure because their lease was coming to an end, have now moved into Nene Park (22).

I have mixed feelings about this.  Certainly its good news for Kettering (which is roughly eight miles from Nene Park in Irthlingborough – the ‘Diamonds’ part being ‘Irthlingborough Diamonds’), and a rational case can be made for the Kettering, Wellingborough, Rushden and Irthlingborough area being ‘over-populated’ clubs.  But football is not an entirely rational topic.  A League club has been lost, and there are still questions to be answered about its rapid decline.

Windsor & Eton  (Tier 7)

Another sad case.  An indulgent benefactor failed to restrain an overly ambitious manager (23).  By May 2010 debts had risen to £137,000, including £50,000 owed to HMRC (24).  In spite of various reprieves, the club was eventually wound up at the beginning of February 2011 (25).  A resurrection club, Windsor FC, has been formed (26).

Although there has been a small decrease in the number of insolvency events, it is worth noting that a number of clubs came perilously close to inclusion in the list – Hinckley United (27), Welling United (28), and Wrexham (29) for example.

While League clubs have shown a general trend towards better financial management and control over recent years, non-league clubs remain very vulnerable.  Common factors ate benefactor-dependence followed by benefactor withdrawal, and tax payment issues.  Clubs at the lower levels are being forced to seriously consider ‘downgrading’ to semi-professional and even amateur status.  There is little evidence that these trends will change.

If readers spot any omissions, please let me know.  I’m afraid last season’s monitoring was necessarily a tad inconsistent because of too many nights spent away for work in hotel rooms with dodgy internet connections.

Posted in Insolvency, Ownership, Resurrection | Tagged: , , | Leave a Comment »

A fish rots from the head down

Posted by John Beech on February 4, 2011

Watching the transfer window lurch to its conclusion has not been an edifying experience – I didn’t have high expectations mind you, and my thoughts were possibly coloured by the constantly breaking internet connection at the hotel in Central Europe where I am staying.

Certainly I was slightly surprised to read last Friday, from my position of intermittent ignorance, that Premier League spending had been “restrained” (1) according to Deloitte.  This of course was before the surreal outbreak of activity which saw Torres transferred to Chelsea for some opaque figure, possibly with as high a valuation as £70m (2), and Carroll transferred to Liverpool for £35m (3).  These transfers certainly helped to restore the inflationary trend of the past few years (4).  While an argument can be made in defence of Liverpool’s position, it is not encouraging to find Alan Pardew ‘vowing’ (I hate the word, but am clearly out of line with most journalists) to spend all the money on new players (5).  Much less encouraging was the report in The Times of India that the Torres transfer had been personally funded by Roman Abramovich (6), this at a club that is ‘strong’ despite losses of £70m (7).

Where does all this leave Financial Fair Play and an end to financial doping?  Well, UEFA apparently seem unconcerned, stating that they have “full confidence that the clubs are increasingly aware of the nature of the financial fair play rules, which aim to encourage clubs to balance their incomes and expenses over a period of time covering 4-6 transfer windows” (8).  I can’t honestly say that I share that level of confidence.  It seems to me that some clubs are pushing spending to the limit and are making no attempt to keep the spirit of financial fair play.

The continuing lack of restraint the top of the pyramid simply continues to stretch the vertical integrity of the football pyramid.  The guaranteed payments by the respective leagues show the increasing distortion.  A Premier League club is guaranteed a payment of at least £41m, a Championship club receives just under £5m, and a League 1 club £1m.  No wonder that ‘ambition’ pushes lower level clubs to unsustainable levels of expenditure.  Breaking point has been reached in some cases and is nearby in others.  A cull through my intermittent bookmarks of the last ten days highlights a few cases:

  • Clevedon Town
    The club is facing a mass exodus of players because of their worrying financial situation (9), exacerbated by Jack Frost.
  • Histon
    The club was recently visited by the bailiffs, although was apparently “all just a misunderstanding” (10).
  • Kidderminster Harriers
    An on/off deal to save the club is, as I write, off, and players are unpaid (11).
  • Leyton FC
    The club has been forced to withdraw from the Isthmian League Division 1 North mid-season (12).
  • Plymouth Argyle
    The club is now dependent on survival on funding finally turning up from its absentee Japanese investors (13).  Under threat from HMRC and with other debts, the future of the club is by no means certain.
  • Welling United
    The club has faced allegations that players wages have not been paid on time (14).
  • Windsor and Eton
    A sad case this – the club was in no position to contest a winding up petition from HMRC (15) and is now no more (although there is talk already of a resurrection club).  Whatever criticism may be levelled at the club’s directors, it is difficult to disagree with President Barry Davies’s assertion that “Not enough money in football these days filters down.

It’s the minnows that are really suffering, and will continue to suffer until the highest level of football gets itself in order.

[Normal service should be resumed when I return to the comfort zone of my own wifi system in the early hours of Sunday morning.  This posting is thanks to the University of Applied Sciences in Kufstein, Tirol, Austria.]

Posted in Cashflow, Governance, HMRC, Insolvency, Premier League, Resurrection, Transfers, UEFA | Tagged: , , , , , , , | 7 Comments »

Whither Chester?

Posted by John Beech on February 28, 2010

The decision of the Football Conference Chairmen to expel Chester City at last showed a will to take the decisive step to bring to an end the sorry tale of this club (see postings passim).

Well, probably that is with respect to Chester City Football Club 2004 Limited.  It can of course apply for membership of a lower league, but is still due in court to face a winding-up petition from HMRC on 10th March.  Not that Director of Football Morrell Maison seems too deterred (1).  He has presented his analysis of what has gone wrong:

Where Chester failed was the fundamental principle of football, they were unable to play games. Other club keep going because they play games.

“There is a lot of shock around the club at the moment but we have been in talks overnight to look at the options because there is still a business there, it still has a ground.

“I do not know what the Vaughan family are planning but I do know that the club could continue, get on an even keel, pay off it’s debts and apply for re-entry further down football’s feeder leagues.

“There are people who say they can get this club going well let’s see if they can.

Well, there you go, sorted!  Mind you, he also says “My first reaction was shock, but when you think, there are probably six or seven clubs operating at the moment in a similar position.”  I’d love to know which six or seven clubs he thinks have been expelled by their respective Leagues, have an owner who has called the fans ‘idiots’, and are trying to sell the club to a group of Danish fans.  Well worth a look, with respect to the last, is a great spoof website Project Brøndby (2 and 3).

Equally of course a new AFC Chester could apply.  More power to City Fans United!  Let’s hope they can bring football back to Chester on a realistic and fan-driven basis.

Posted in Football Conference, Governance, Resurrection | Tagged: , , | 2 Comments »

Think of a number…

Posted by John Beech on December 28, 2009

It doesn’t take an academic to spot that ‘one million pounds over a period of time’ is a completely meaningless amount.  The ravages of inflation mean that a pound today is worth far less than a pound was worth, say, twenty years ago. One thousand pounds a year as the starting salary of a graduate in 1970 would be the equivalent of almost £21,000 today, for example (1).

Yet ‘one million pounds over a period of time’ is precisely, or in fact very imprecisely, what David Handley, formerly the Financial Director of King’s Lynn, who certainly therefore should know better, has announced he will invest into a new club, that is, one which he would own.  His announcement (2), I’m afraid, is no more than, in the traditional sense of the phrase, clap trap – a cheap theatrical device to get easy applause.

He says he wants fans on any new board of directors, a claim familiar to Accrington Stanley fans, who gained no representation when Ilyas Khan actually took over.

Quite why he is prepared to invest such a large amount now (or over some unspecified future period) but was prepared to see the former club disappear because of a debt of £66,000 is unexplained.  He is, after all, the man who as recently as October assured fans he ‘will have The Walks outfit on a sound financial footing by the end of the season… I want the fans to judge me at the end of the season, but I’m determined to get the club in a good financial position and move forward from there‘ (2).  The answer must surely lie in the issue of who controls the club, both the previous manifestation and any future one.

If he was prepared to stand by and let the old club fold, why exactly should fans or King’s Lynn Borough Council (owners of the Walks stadium) have any faith in his plans for a future club?  If he wants what is best for a new club and for the community, would he be prepared to put funding into a Community Interest Company running a new club?  The answers to these questions are vital if he wishes to salvage any credibility.

Posted in Benefactors, Community, Ownership, Resurrection | Tagged: , , , | 7 Comments »

Folkestone Invicta anyone?

Posted by John Beech on July 6, 2009

Does anyone know the latest news of Folkestone Invicta, the resurrectionist successor to Folkestone Town who were expelled from the Beazer Homes League in 1990 over financial difficulties?

On June 24th the Kentish Express reported the club as facing the threat of Administration (1); they faced an ‘imminent Administration threat’ according to Kent News the following day (2), and on the 29th were ‘ expected to go into Administration’ (3); also on the 29th, the Kentish Express reported that a decision on going into Administration over debts of £70,000 was due within twenty-four hours (4). Since then, no news. The club website (5) has, as I write, nothing more recent than ‘Invicta set for pre season’ dated 15th June..

Was it an awful lot of smoke without fire, or is there still a frantic struggle to re-finance going on?

Posted in Insolvency, Resurrection | Tagged: , | 3 Comments »

The fate of resurrectionist clubs

Posted by John Beech on July 6, 2009

I’m not sure what it is that draws me to following the fate of resurrectionist clubs. Perhaps it’s just the curiosity of seeing whether the new club can make a better fist of it than its predecessor. Maybe it’s the delayed gratification of following their success or failure over a number of seasons. No matter the reason, I am currently working on a research project investigating the determinants of their fate.

A number of them have featured during the 2008/09 season, some for the right reasons, some not. The success stories have undoubtedly been AFC Wimbledon, about to play in the Conference National, and FC United of Manchester (I count them as a resurrectionist club even though their predecessor is not actually defunct!). Both enjoy healthy inherited fanbases and both are well run, so their success was predictable.

Accrington Stanley (who are a resurrection of what was itself a resurrection club) has faced problems, notably a winding-up order from HMRC, narrowly avoided by a takeover (1). Could it just be that the proximity of Blackburn and Burnley mean a club in Accrington is always on a hiding to nothing in the senior divisions?

Newport AFC faced the worst of problems when they reformed from the ashes of Newport County – they could only find a home at Moreton-in-the-March, and, after a brief return home, at the marginally closer Gloucester. Narrowly escaping expulsion from the English pyramid, they have fought their way back as far as the Conference South, just one tier below the point which Newport County was expelled from. A recently revitalised Supporters Trust may well see them eventually get back to whence they came.

The last club to be resurrected in the pre-commercialised era was Maidstone. Their exile was more traumatic than even Newport’s – after 15 years they are still not playing back in Maidstone, a situation which becomes more and more problematic as the years go by. Will the hoped for return bring back more Maidstone fans than lose Sittingbourne (where they currently play) fans? Kent seems a particularly difficult county in which a football club can thrive. Other clubs which have faced insolvency events over the years include Dover, Folkestone Town, Gillingham, and Margate. This season Ashford Town have failed to pay players amid talk of Administration, and Folkestone Invicta (resurrection of Folkestone Town) are dangerously close to calling in the Administrator.

Another club to make the news this season is AFC Scarborough, wound up with debts of £2.5m just over two years ago. Again in exile, they plan to return to Scarborough, from Bridlington (2). A relatively short distance (17 miles) for a relatively short period should not dent their attendance.

Down the coast at Boston, there was good news earlier in the season – the club was allowed to keep cup competition prize money (3), a rare case of a governing body pragmatically distinguishing between different regimes at a club.

Further down, at Canvey Island, who were decimated by the withdrawal of benefactor Jeff King in 2005, the club continues to claw its way back to whence it came.

Worst news was at Hornchurch, where the club, only re-formed in 2005 following the collapse of their backers, has been forced into Administration (4). Details of these latest problems are scant, and if any reader can provide some I’d be very grateful.

Posted in Resurrection | 7 Comments »

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