Non-league clubs are complaining that they are being treated more harshly and more inconsistently than league clubs who run into financial trouble. Prominent among the complainants are Northwich Victoria and Salisbury City who consider that they have been unfailrly demoted to Step 3 of the non-league pyramid for failing to comply with financial rules.
Non-league clubs are complaining that they are being treated more harshly and more inconsistently than league clubs who run into financial trouble. Prominent among the complainants are Northwich Victoria and Salisbury City who consider that they have been unfailrly demoted to Step 3 of the non-league pyramid for failing to comply with financial rules.
Noirthwich Victoria chairman Jim Rushe has called on the Conference to declare an amnesty for insolvent clubs – or face meltdown. Rushe claims that clubs are so terrified of the Conference’s financial rules that they are hiding their debts instead of seeking help.
At present the Conference requires clubs to submit their accounts on a quarterly basis, providing proof of tax, national insurance and VAT payments as well as current year turnover and wage outlay. However, Rushe claims that these figures are easy to fiddle.
Considerable controversy has surrounded the Conference’s Appendix E which has now been replaced by a new rule, 14b. Under Appendix E any club in administration or operating under a CVA had until the second Saturday in May to pay off their debts in full or face expulsion from the entire Conference.
The new Rule 14b will give insolvent clubs three years to pay off their debts rather than the end of the current season. Even then a club will be demoted only division, not booted out of the competition altogether. Rule 14b has been adopted by every league from Step 1 to Step 4, meaning there will be standard insolvency sanctions in the top levels of the non-league pyramid for the first time. Several clubs did argue against debts being paid in full, as this prevents clubs entering administration through a CVA.
Northwich Victoria consider that they have done everything they can to sort out their finances, agreeing a CVA worth 42p in the pound which is certainly better than what has been on offer at, for example, Portsmouth. The wage bill has been reduced from £10,000 a week to £3,000 a week over the last two years.
In the case of Salisbury City, they have paid off all creditors and have a deal with the taxman to pay 27p of their £228,000 outstanding debt. They are aggrieved that they are being replaced in the Blue Square Premier by Forest Green Rovers whom they claim have bigger debts.
The rules may be more severe than those in the Football Leaguie, but they have been correctly applied. What needs to be thought about iare the deeper structural problems of the non-league system.
Once the Conference in effect became a fifth division, there was considerable pressure on teams to become full-time and to pay higher wages. Those teams that remained part-time tended to struggle because they trained less and had lower fitness levels. The higher wages in the apex of the non-league pyramid had a knock on effect lower down the system. Some clubs at Step 3 or 4 have run up very high debts. Replicating what happens in the Football League, clubs have splashed out to secure promotion and then ended up with financia problems: Windsor and Etom, promoted to the Zamaretto Premiership, appear to be the latest example of this problem.
Non-league clubs have also been hit hard by he recession because they have often been bankrolled by small or medium-scale business people who have found themselves out of pocket. There is an alternative model, however. At Zamartetto Premiership side Leamington (of which I am a vice-president) the club has been run as a community operation with no dominant shareholder. The keynote has been financial sustainability. There have been some problems along the way, and thee will always be pressures from some fans to splash out to gain success on the pitch, but so far the club has managed to operate within a budget while developing its facilities since its re-birth ten years ago.