I was rung by a leading national newspaper today about the financial problems League 1 and League 2 clubs. There are fears that as many as six could go into administration in the next few weeks. That may be an exaggerated forecast, but the credit crunch has hit the local businesses that support clubs at that level. The answer in terms of a strategy is to have a lean and mean financial model that takes account of what is possible. Darlington got themselves into trouble by building a stadium that was far too big for their potential support.
I was rung by a leading national newspaper today about the financial problems League 1 and League 2 clubs. There are fears that as many as six could go into administration in the next few weeks. That may be an exaggerated forecast, but the credit crunch has hit the local businesses that support clubs at that level. The answer in terms of a strategy is to have a lean and mean financial model that takes account of what is possible. Darlington got themselves into trouble by building a stadium that was far too big for their potential support. However, although there may be bad news to come, for the moment it is the non-league where clubs are in real danger. Many non-league clubs have shifted to a full-time squad model which may not be sustainable even in the Conference for all but a few clubs.
Stephen Beer has pulled the plug on his bid for Weymouth because the cost soared to, he claims, £300,000. He was struck down by a stroke hours before he was to meet the press to announce the takeover. The 22-stone Beer also faced a Devon newspaper exposé which made a number of allegations about his business and personal life. In particular, it was suggested that he did not have the resources that he claimed. Without commenting on his personal circumstances specifically, a more general point is that lower league clubs often seem to attract bailouts from businessmen seeking the limelight which then go pear shaped when it appears that all is not as it was made out to be. Terras director Ian Winsor insisted that Stephen Beer did have a bit of money but ‘he has spent too much time in Weymouth over the last couple of weeks and, through speaking to people, heard so much bitterness that he got scared.’ I suppose that is one way of spinning it, but the reality for the Terras is that they are lurching towards administration and an uncertain future.
Over at Merthyr Tydfil FC, the chairman, Wyn Holloway, has said that he does not want a penny for the club but will not sell it to the fans. He will no longer bankroll the Martyrs after spending £800,000 on them over the last ten years – an expensive hobby indeed. Club officials did manage to find a generator to run the lights at their last home fixture. It is hoped that a home friendly with Cardiff City on March 25th will give them enough money to finish the season. It still leaves the club with a £315,000 debt. The chairman claims that revenue from sponsorship and other sources has fallen from a respectable £9,000 a week to less than £1,000. John Strand, spokesman for the Merthyr Supporters’ Society responded to claims by Holloway that they had no business plan by stating, ‘It’s difficult to know how much money it would take to run the club, because they haven’t published their accounts for the last three years.’
Former Conference side Bromsgrove Rovers, now also a Southern League side, is being pursued through the courts for five figure debts. British Gas has won a case against the club. It was the gas board, of course, which finally did for the old Accrington Stanley. There has been talk of a merger with nearby Redditch United. The club was in administration only eight years ago. However, a consortium of former directors, officials and local businessmen would like to take over the club so they may survive.