Notts County FC rescued after takeover by Blenheim Consortium
Founded in 1862, Notts County are the oldest professional football club in the world (amateurs Sheffield FC are the oldest club). But at one time it looked as if they could be the first club to fold after they were given a final deadline expiring on 9 December 2003 by the Football League. The Meadow Lane club was in administration for a record eighteen months. They were finally rescued after a takeover by the Blenheim Consortium headed by Peter Joyce.
They had hoped to emerge from administration in August, but a £3 million takeover bid fronted by businessmen Raj Bhatia and Frank Strang collapsed at the last minute. Much in the end depended on the efforts of the club’s Supporters’ Trust who raised £250,000.
The club’s problems started with a £2.3m takeover deal in 2000 by American businessman Albert Scardino. He acquired the club from local plumbing and heating merchant Derek Pavis. Under Scardino, the club pushed for promotion, signing players on big contracts. But as is so often the case, Scardino’s financial backing failed to materialise. The ITV digital collapse compounded the club’s problems, but even without that they were paying their players more than they were making. A falling out between Pavis and Scardino did not help matters. In June 2002 the club went into administration with debts of £7 million.
The administrator negotiated a deal which would allow development of land around the club for upscale riverside apartments. In return the club would be given a stadium with a capacity of at least 10,000. However, the club has continued to lose money while it has been in administration due to the outsize wage bill. The NatWest bank is owed £700,000 secured on the club’s current lease while Pavis owns a lease on the west stand for which the administrator has agreed to pay £500,000. Sums owed to football creditors including the Professional Footballers’ Association, amount to some £700,000, of which half has already been paid. Unsecured creditors, including the ambulance service and local traders, will get nothing of the £580,000 they are owed, while Scardino and Pavis will lose loans of £1m and £1.7m respectively. The outstanding tax and VAT bill of nearly half a million will be paid at 11p in the £, representing another subsidy from taxpayers towards a failing football club, although it should be recalled that football generated £536m in tax revenue in 2001/2.
When the administrator’s fees and costs of nearly half a million are added in, it will cost £3.2m to get the club out of administration. The administrator has put in £1.4m as loans, £1.8m will come from the sale of the lease to developers. New interested businessmen emerged, including Roy Parker, a former Leicester director and Peter Joyce, a previous Notts director. The League has emphasised that it is not going to allow any club to limp on insolvent for eighteen months in the future. League chairman Sir Brian Mawhinney said, ‘It is right that clubs that suffer financial difficulties are given a reasonable opportunity to restructure their affairs. But it is also right that this opportunity is not indefinite, as clubs in administration gain a competitive advantage.’