It’s not just the courts at Wimbledon that are busy at this time of year – a worrying increase in football clubs facing administration and liquidation is creating more work for the High Court in London, as winding up petitions are served against a growing number of clubs unable to pay their debts.
When a club hits financial difficulties it can be a time of great uncertainty for fans, and a lot of our work in this area is in helping supporters groups to get to the bottom of what is going on at their clubs, and to ensure that the fans’ voice is at the forefront of ensuring stability and sustainability once clubs and owners manage to navigate their way out of financial difficulty, whether through a process of administration or ultimately to aid the process of setting up a new club if the existing club is liquidated.
Two of the northwest’s oldest football clubs have been in the headlines for all the wrong reasons in recent months.
At Bury, the club’s previous owner, property developer Stewart Day, had run the club close to the brink of existence as he was unable to pay loans secured on the club’s Gigg Lane ground. The club were training at Manchester City’s old training ground, but notice has been served on them there as they’ve been unable to pay for the upkeep of facilities.
Following a period of great uncertainty, with his other businesses on the brink of administration and with non-payment of players and club staff becoming a more regular occurence, he sold the club to Steve Dale for £1 in December 2018.
The new owner has proposed a CVA, or Company Voluntary Arrangement, where creditors are asked to accept a percentage of monies owed to them over a period of time. Creditors haven’t been able to come to an agreement yet, with Dale claiming that the club owes him in excess of £3m.
More worryingly perhaps, according to David Conn in the Guardian, is that Dale’s takeover of Bury did not go through the normal EFL checks, and that he has still to provide key information required as an owner of an EFL club.
Despite this backdrop of economic turmoil, overdue accounts and non-payment of players, Bury were actually promoted from League 2 as runners-up.
We’ve been working with Forever Bury, the club’s Supporters Trust, in helping them to oppose the winding up orders served against the club. The group are “praying for a miracle, whilst preparing for the worst”, with the club due back in court on the 31st July.
Just a couple of miles down the A58, Bolton Wanderers have entered administration, having racked up debts in the region of £25m during the ownership of Ken Anderson, despite the selling off of various club assets including land around the stadium over the past few years.
This comes just three years after Anderson took over, with the previous owner agreeing to wipe out £170m owed to the club. The administrators have identified a preferred bidder – Football Ventures – but have yet to come to an agreement on a way to move forward.
The precise breakdown of who is owed what, according to the administrator’s report, is unclear. Anderson claims he is owed around £7.5m in secured debt, with the administrators placing the figure at £1.5m. Similarly the previous owners, Fildraw, who pumped money back into the club in the last three years to keep them afloat, are shown as being owed £10m but claim a figure closer to £17m.
Bolton Wanderers Supporters’ Trust (BWFCST) are confident that the club will be able to find a way out of its recent difficulties, however, with “extremely positive” talks ongoing with the administrators and other interested parties.
“Whilst confidentialities must be maintained at this time, our focus is firmly fixed on being able to play a major part in collaborating with and assisting those who have the long term stability and very existence of our club as their main aim,” BWFCST said.
“And on behalf of all those who hold Bolton Wanderers so close to their hearts, we would like to thank all those who so generously contributed to our ‘Fighting Fund’ to raise the funds which have allowed us to access and utilise the level of professional advice now needed. Thank you all!”
These two cases are not unique, and others like them occur up and down the country. While we will continue to assist supporters whose clubs fall into these difficulties, we will also continue to call on the game’s authorities to improve the regulatory processes.
Tighter financial controls and better monitoring must be put in place to prevent clubs finding themselves in these difficulties, jeopardising the existence of community institutions that have existed for more than 100 years.
Thanks to PA Images for the image used in this blog.