It’ll Be Off

David Conn
September 17, 2008, 10:31 am
Filed under: Opinion | Tags: ,

Yesterday The Times saw fit to print one of the worst pieces of football journalism I’ve ever read. The piece, by former ping pong champion Matthew Syed was easily the worst I’ve seen in print since Piers Morgan ‘interviewed’ Thierry Henry for GQ magazine. Syed, in a childish exercise of bluster and straw man arguing, set up a caricature of the Newcastle fans, before tearing apart view points held not by real fans, but by the ones he himself had created. It was a dire, poorly written, poorly researched and poorly executed example of all that is wrong with British football journalism, and wouldn’t have been out of place on a blog such as this one.

Thank fuck, then, for David Conn. His article in today’s Guardian manages to be both interesting and informative. He remains one of only a handful of sports journalists with bothering with, and finding an article by him is often akin to finding a two quid coin in a pile of shit – a rare treat, and a just reward for putting up with all the crap that preceded it.

So Mike Ashley, who made £929m when he floated his Sports Direct business on the stockmarket last year, says he does not have enough money to run Newcastle United, and needs somebody richer to take it on. The Premier League’s second-tier clubs, including Newcastle and Everton, are desperately hoping, now Manchester City have hit oil with the Al Nahyan ruling family of Abu Dhabi, that one of the world’s richest men might buy them for the glory of owning a Premier League “brand”.

Quite how this rush for billionaires will affect the rest of football remains to be played out. Premier League fever can make it easy to forget that Chelsea – courtesy of Roman Abramovich’s £578m loaned subsidy – top a pyramid whose bottom three clubs, Rotherham United, Bournemouth and Luton Town, are on minus six, 14 and 20 points respectively after deductions for their financial collapses.

The men who run the Football League and the Conference are most concerned not with searching the planet for rich men to bail their clubs out, but with how to stop them overreaching themselves and collapsing into insolvency. Concerned voices are warning that another round of wage hyper-inflation in the Premier League, from Robinho’s reported £160,000 a week, will trickle down.

Charlie Clapham, Southport’s chairman and the Conference’s vice-chairman, says that since his club won promotion to the Conference 15 years ago, players’ wages have increased about tenfold, just as they have higher up.

“It is competitive and football is all about chasing the dream,” he says. “The leagues are all connected and it all comes down. Players’ wages have gone up hugely but at our level clubs’ incomes have not to the same extent.”

Since 1992, the richest era the English game has known, more than 40 of the Football League’s 72 clubs have been insolvent. Several, including Leeds United, Leicester City, Barnsley, Ipswich Town and Queens Park Rangers, stored up their problems in the Premier League then collapsed into insolvency when they were relegated.

Many millions of pounds have been left unpaid; St John Ambulance, that most shaming of creditors, was left owed more than £35,000. HM Revenue and Customs, owed £7.7m by Leeds alone, decided some time ago not to write off any more public money to football’s excesses.

In the face of protests from fans of the affected clubs, the League is standing firm on its policy of points deductions, although it is reviewing its policy generally towards insolvent clubs. The League’s rules impose an automatic 10-point penalty for clubs who become insolvent, and require them to exit administration by achieving a company voluntary arrangement (CVA) to which 75% of creditors agree. HMRC, owed mostly PAYE on the excessive wages which sent the club insolvent in the first place, has been refusing to agree to any CVA settlements because “football creditors” – the players themselves – have, by League rules, to be paid in full. The additional sanctions, 15 points deducted from Leeds last season, 17 each from Rotherham and Bournemouth, 20 from Luton (also deducted 10 by the FA for transfer irregularities), have been imposed for failing to agree CVAs.

Fans of those clubs have complained that the penalties are excessive, and that they hit fans and new owners rather than the failed former regimes. But the League’s chairman, Lord Mawhinney, supported by member clubs, argues that those owing millions in tax, become insolvent then cannot get a CVA agreed should not take their place in equal competition with clubs that have paid their way.

“The rules are about protecting the integrity of competition,” Mawhinney says. “Some people who do not understand the issue are vociferous about points. But we will not be blown off course because [those] with a vested interest make a lot of public noise.”

The League, however, is aware that the football creditors’ rule is not the game’s most attractive facet, and nor is a competition which features clubs docked points for financial reasons which fans can find difficult to understand. The policy review began in earnest during the League’s board meeting last week, and although Mawhinney will not reveal the detail of the discussions, it is widely recognised that the only satisfactory answer is for clubs to stop going bust in the first place. He says proposals should be ready to put to clubs in three to six months.

In the Conference patience wore thin with a succession of clubs becoming insolvent, and rules have been introduced which make it England’s toughest league on overspending. Two years ago the Conference scrapped the “football creditors” rule. Now, even if a club has agreed a CVA, it must pay all debts owed to any creditor in full, by the second Saturday of May. If not, a club is expelled – or, to use the more polite term favoured by the Conference’s chief executive, Dennis Strudwick, “not accepted for registration” the following season.

That has not been an idle threat. Without much attention paid by a football world fixated on the top, several long-established clubs have gone bust or fallen out of the Conference. Scarborough, after four years of insolvency, finally went into liquidation and out of existence in June last year. Boston United, who finished last season in Conference North, had not paid their creditors in full by May this year, were expelled and are now in the UniBond Northern Premier League. Halifax Town also failed to pay their creditors in full; the Conference refused to accept them for this season, and the old club, formed in 1911, ceased to exist. A new club, FC Halifax Town, formed by a supporters’ trust, is playing now in the UniBond League Division One North.

The Conference has introduced a new system this season for the 68 clubs in its Premier, North and South divisions, to help them keep on top of their debts. In a system developed with the FA, the clubs will report to the Conference every quarter on what they owe HMRC, and are required to show after two months that they have paid their tax in full, or have a written agreement scheduling the payments. Again, the system has teeth – if a club fails to pay its tax, the Conference will impose a transfer embargo.

“This is about helping clubs live within their means,” says Clapham. “We believe debts should be paid in full, to everybody, not just footballers.”

The most damaging phenomenon, which has put most clubs in trouble, Clapham points out, has been when new owners arrive at clubs with grand plans, spend big in an attempt to buy success, then pull the plug or run out of money. “The sugar daddy model doesn’t work,” says Clapham. “It’s unsustainable.”

Strange that it has been a recipe for mayhem in the Conference, yet in the Premier League it is now the way ahead.

The bit in bold towards the end of the article is as relevant to us in the Unibond as it is to any club in the Blue Square. Fans of certain clubs in our division may go all ostrich on us, and stick their head in the sand, but the writing remains on the wall. Recklessly throwing money at a football club isn’t a guarantee of anything other than financial collapse.


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