Adders To Subtract Themselves: Threat Fought Off By Club

This week brings some sad news and some good news for non-league football.

First, the sad news:  Atherstone Town of the Southern League, Division One Central, have announced that they will resign from the League at the end of the current season.  Atherstone pay their players nothing at all, but still find the costs of playing at this level prohibitive.  They are just about the northernmost club in their division, as the Northern Premier League edges ever further southwards; more on that in a moment.

Now to the good news.  Sheffield FC, the oldest football club in the world - they rather pompously nickname themselves "Club" - have survived a winding-up petition, which I must confess I was unaware that they were facing.  Club's chairman Richard Tims was quoted in the Sheffield Star thus:

"The HMRC are playing hard ball - it doesn't matter if clubs owe £500 or £500,000, they go after you," he said.
"Small businesses are stretched and pay bills at the last minute; we just stretched it (paying the bill) out too long.
"If I said how much we are talking about you'd laugh. It was a small amount and we paid it off. Small companies always have to borrow from Peter to pay Paul. None are awash with cash.

There's an interesting discussion here  on the way non-league football in England is structured.   Broadly speaking, there is an imbalance of clubs between the North and South of the country, which is causing the Conference North to move ever further southwards. There are a number of reasons for this, of which two stand out.


One is the number of leagues at step 5.  There are 14 of them; but if you draw a line separating the North of England from the South - which would roughly be from the southern end of the Welsh border to the southern corner of The Wash - the imbalance becomes obvious, despite that line dividing England near enough equally in terms both of population and area.

Just 4½ of the step 5 league areas would find themselves to the north of that line; 9½ would find themselves to the south of it.

The 4 to the North would be the Northern League, Northern Counties (East) League, North-West Counties League and Midland Alliance; the half would come from the United Counties League.

Those 14 leagues, of course, supply clubs to the three leagues at step 3 & 4.  Except one of them rarely does - and that is the Northern League, which covers the North East of England, plus Cumbria.  Teams from that league rarely seek or accept promotion; teams from the other 13 leagues usually do.  As the rules currently stand, 12 teams are relegated from step 4 - two from each of the 6 divisions at that level - and the 12 teams with the best records from step 5 are promoted, though only one promotion is allowed per division.  Ultimately this will exarcerbate the north-south imbalance at steps 3, 3 and 2.  So, what solutions?

My favoured one is this - though there is very little chance of its happening!

* Merge League 2 and The Conference.  No other major country in Europe has five national divions (sorry Scots) and only two - France and Germany - have as many as three. This would be a north-south split.

*At the next level down, have four divisons.  These would cover the North, South-East, South & South-West, and Midlands.

*The level below that, have 8 divisions.  Two would supply each of the four divisions above them.  Most of these teams would come from the current step 4, with a handful from step 5.

*The next level down would have 16 leagues, instead of the current 14.  The balance between north and south would be restored.

Kidderminster Worriers

The good news from Welling Utd and Windsor & Eton has been followed by bad news for two Blue Square Premier clubs, Histon and Kidderminster Harriers.


Both have been charged with breaches of the Conference's stringent financial reporting regulations.  The regulations were put in place to help identify clubs who might be heading for trouble, particularly with HMRC.
Part of the ides behind the regulations, I suspect, was that they would force clubs to examine what they were doing - having to make written reports of their standing with the tax people might, just, help clubs avoid getting into really deep trouble.


Kidderminster and Histon are both charged with submitting misleading or inaccurate information in their financial reports.  Histon have, for some time, shown all the signs of a small club that has risen above its natural level, and spent too much money in trying to stay there: now there's a reckoning to be paid and their troubles will surprise no-one greatly.  Kidderminster are a little different: they find themselves pretty much at the level they are used to - they even managed a short spell as a Football League club.  But for them, the difficulties are potentially even worse.


It's not just that they will face a disciplinary hearing which could see them facing a points deduction: their very future is under threat.  They have been up for sale for quite a while now, and this worrying statement appeared, not on the club's official site but in that run by the Supporters' Trust. KHIST:


Despite a tremendous amount of hard work our football club still has major financial hurdles to overcome. To survive the club needs £150,000 before the end of the month and a further £50,000 by the end of January. Although costs are being looked at so that the club is run in a sound financial manner going forward, let’s make no bones about it, without an immediate large cash injection the future of the club is uncertain.


So, not only are Harriers facing a points deduction for their financial reporting issues - Welling Utd were docked 5 points for much the same thing earlier in the season - they are now facing, I fear, administration which would cost them another 10 points, at the very least.


Worcestershire seems to have more than enough non-league clubs in difficulty.  Apart from Kidderminster, Worcester City have their difficulties with their new stadium; Bromsgrove Rovers became the first senior non-league club to go to the wall this season when they closed down in August; Redditch Utd have a tiny playing budget and face almost certain relegation from Conference North; and Halesowen fans seem, by and large, to loathe their owners, the Ingram brothers.

Welling saved, Royalists receive a stay of execution

Very good news tonight from Welling Utd, who have raised sufficient funds to pay off the debt owed to HMRC - with a surplus, too, so that "other liabilities" can be addressed.

Almost as good news from Windsor & Eton, who went into last Saturday's match against Hednesford believing it could have been their last but managed to get a 56-day adjournment of their winding-up order.  There is still work to be done; the club will almost certainly enter administration - or at least arrange a CVA, which would also be regarded as an "insolvency event" and would lead to a 10-point deduction.  A player exodus is likely, with striker Dave Chennells expected to leave, for a fee, during the January window.  Goalkeeper Delroy Priddie has already left.

Meanwhile . . . .  the Worksop v Mansfield FA Trophy tie will be played at Ilkeston Town.  That's two clubs without a ground, playing at a ground without a club.

Battle Royalist (cont) and Mansfield of Bad Dreams

As ever there are a number of clubs who find themselves sailing in choppy waters, though few can be in as much peril as Windsor & Eton or Mansfield Town.    Let's begin, though, with a quick look at some others . . .

I can only imagine the reaction of Bishop's Stortford  to seeing themselves due for a High Court appearance in connection with a winding-up petition from HMRC.  The petition had come about because Basingstoke had missed an agreed payment of outstanding tax to HMRC.  Except that they hadn't: all payments had been made and the petition should not have been served.    Stortford's complaint triggered this response from HMRC: 

"I am sorry to learn about the appearance of the advert in the Gazette. I appreciate that your email of 10th November confirmed electronic transfer had been made; to cover the November instalment. Unfortunately, the payment itself doesn’t trigger any reminder here to move on withdrawal of the advert. In the circumstances HMRC will seek dismissal of the petition, rather than the planned adjournment, at the Hearing on 1 December 2010."

Meanwhile Welling Utd managed this week to have a winding-up petition adjourned, for fourteen days.  The club is in negotiations with potential buyers, but nothing has yet materialised - not enough to be made public, anyway.  Presumably they managed to convince the court that something was in the pipeline.  I'm not so sure, and Wings fans don't seem to be too optimistic, either.

On to the two clubs mentioned at the start of this post.  In each case, there's a dispute between past and current owners.

IN the first case, that of Windsor & Eton, the former owner is also a potential new owner.  There's an outline of their case in the Battle Royalist post of November 5th.   Significant developments there in the last few days.

First, this outburst from current chairman Peter Simpson.  From which this bit caught my eye:

“Our income is £60,000 per year but our expenditure is £200,000. So it almost certainly looks like liquidation and you can’t trade if you are insolvent.

 
If income is just 30% of expenditure, expenditure is far too high.  That may seem like a statement of the obvious, but sadly quite a number of non-league clubs operate in much the same way.   What caught the eye of  more people, however, was another passage from that story:

Royalists, with the financial backing of former vice-chairman Kevin Stott, had been working around the clock to form a business plan to satisfy HMRC. However, Stott decided to pull the plug on Wednesday, leaving Royalists with nowhere else to turn.
It certainly excited Keith Stott's interest - he was quick to speak to another local paper, the Maidenhead Advertiser  but the article doesn't make it clear which part of Simpson's statement is "highly inappropriate and factually incorrect"  and I don't think Stott's words can accurately be described as a "refutation," but this evening's public meeting should see Stott put some more flesh on those bones. The  meeting is going on as I type this.  Windsor & Eton played what could have been their last ever game this afternoon, beating Hednesford 3-2.  There were just 197 people there.

Let's move some way north - and a couple of steps up the pyramid - to Mansfield.

The club was taken over a couple of months ago by "mega-rich local businessman" John Radford.   He almost immediately set about trying to recover money paid out by the previous board - either in dividends, to a remarkable £2.4million when the club didn't appear to be making a profit; or in loans to directors, most of which haven't been repaid.  The beneficiary of those dividends and loans - the greater part off them, anyway - was Keith Haslam, the club's former chairman.  He used a large part of the dividend he received to buy Field Mill off the club, and he has rented it to them ever since.

Mr Radford offered to pay the rent due to Mr Haslam's company - Stags Ltd - into an escrow account while the dispute over the dividends and loans was settled.  Mr Haslam declined the offer and, this week, evicted the club from Field Mill.

It looks as though this will take some time to be settled.  In the meantime, Mansfield are likely to play their home games either at Alfreton or, just possibly, at Hucknall.

The demise of Ilkeston Town and the possible or likely demise of Welling Utd and Windsor & Eton will have implications for relegation further down the pyramid.  I'll address that issue in my next post.