Posts Tagged ‘Administration’

DARIO Gradi would not shed a tear if Cheshire neighbours Chester City went out of business.
Gradi guided Crewe to promotion from the old Division Three just behind Chester in 1993/94.
In fact, it was only a 2-1 win at the Deva Stadium on the final day of the season – with goals from Ashley Ward and Tony Naylor – that ensured Crewe went up.
At that time City looked the club with more potential.
But the sides have had vastly differing fortunes since.
The Alex spent eight seasons in the Championship while Chester desperately struggled. Now the Blues are on the brink of extinction.
Gradi said: “People ask me what the long term aim is at Crewe. I always tell them it is to stay in business. That has to be the main objective.”
Asked if clubs like Chester and Portsmouth will become extinct, he added: “I have to say in many ways I hope so.
“Clubs keep getting to the brink of disaster and then being saved.
“That doesn’t discourage people from overspending.
“It clearly can’t continue. Everyone has to start paying realistic wages.
“But I don’t really care. As long as we stay healthy and make sure we don’t get into financial trouble, that’s my main concern.”

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When Chester City’s Stephen Vaughan won permission to start this season in the Blue Square Premier, there were several gasps of disbelief. While the issues relating to the financing of football clubs are seldom a black and white issue, there seemed to be little question that, in having an application to enter into a CVA successfully opposed by HMRC during the summer, they should not by any rational logic (and certainly not under the rules of the league in which they play) have been allowed to start the season.

The decision to dock them twenty-five points but to allow them to play on was a classic fudge, the equivalent of applying a sticking plaster to an amputated leg. The authorities spared themselves the indignity of having to play a season with an odd number of clubs, Vaughan got himself theoretically endless time to try and arrange alternative financing for the club and everybody was happy. Everybody, that is, apart from those that considered Vaughan to be far from a fit and proper person to run a football club.

Chester’s start to the season hasn’t gone according to plan, either on or off the pitch. They have won just two games from their first thirteen in the league and are currently on -14 points. They are still twenty-four points from safety and would only be in seventeenth place in the league without any points deduction. Crowds have slumped to around 1,000 and there remains no sign of any sort of investment that may just give the club a fighting chance of staying up this season. The supporters remain in a state that seems to be not far short of civil war with each other. It doesn’t sound like it’s much fun to be a Chester City supporter at the moment.

Their situation took a turn for the worse after Tuesday night’s 2-1 home defeat by Forest Green Rovers. Setting aside the fact that winning a home match against Forest Green Rovers should be the bare minimum requirement if they are to stand any chance of staying up this season, the match showed up fundamental, institutional cracks in within the club which seem irreparable. There was a fight in the dressing room between two players at half-time, and this morning manager Mick Wadsworth (not a man that is unfamiliar to financial crises, having been previously been involved with Carlisle United during the 1990s, Scarborough and Gretna before going to The Deva Stadium) departed from the club  yesterday with some telling (if somewhat garbled) words about the atmosphere at Chester City at the moment:

This place is full of negativity and it’s really difficult. I’ve not known an environment like it. I know I’ve got to change it and we got to change it and I appreciate that and I take that responsibility but it’s so negative at times it’s very wearing. We were rubbish first half and good second half, it was as simple as that. We gave ourselves too much to do. We knew how we wanted to start and we talked about that and didn’t do it. I never want to be negative against the lads because they are a great bunch. But we said and they said we didn’t have one player in the first half that was on top of his job.

Considering all of the above, this week might not have been the best week to make public the exact extent of their current financial plight. At Chester City, though, common sense doesn’t seem to be a commodity that is much in supply, so perhaps it is no surprise that this peculiar message turned up on the clubs official website on Tuesday – a website which, it should be added, doesn’t appear to have been updated in any other respect since the start of the new season. The spreadsheet that comes with it makes for fairly horrifying reading, although it is worth wondering aloud why it announces a profit as a loss and, more significantly, the question of how the “the 09/10 Profit and Loss account” (the website’s own words there) can be calculated in September 2009.

Let’s be generous, though, and imagine that these are projected figures for this season (after all, they take the £30,000 “gift” from the Premier League into account and that was definitely arranged since the start of this season) and that they are for the whole season. The figures reveal a club that has been trying to arrange a CVA but is still paying fifty per cent over its annual turnover on wages for players, full-time staff, management & support staff and YT scholars. It pays £23,000 per year in “overheads” for those scholars. There had better be some great young players in there – they’re costing an arm and a leg.

On top of that, there is over £100,000 on “football overheads”, but this is listed quite separately to almost £90,000 on “match day costs”. There is also a cheeky £135,000 that is being paid on “general overheads”, although what these are is also not explained. The bottom line – quite literally – is that, if these figures are correct (and it is almost impossible to believe that they are), Chester City Football Club is currently making a loss that is almost the same amount as its annual turnover. To put that into perspective, let’s quickly take some figures from elsewhere. Manchester United had an annual turnover of around £300m last year. If they were following Chester’s example, they would have made a loss for that year of around £600m, and they would have paid out about £450m in wages.

It’s difficult to believe that these figures are true, but this raises a further question. If they’re not, then who put them on the club’s official website? A disgruntled employee? Stephen Vaughan, in the hope that he can dissuade HMRC from issuing a winding up order against the club by demonstrating that there would be no realistic prospect of a dividend from such a petition? Whatever way this is spun (and, considering that the clubs official website has hardly been otherwise updated since the summer, it’s likely that it won’t be spun at all), it is bad news for the club. Whether these figures have any truth in them or not and whomever made them publicly available, that such a thing could happen at all can only indicate Chester City is in a state of complete and utter disarray from top to bottom.

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Chester City have today been handed a lifeline in their bid for survival in the Blue Sqaure Premier League.  League rivals  Salisbury City are to be hit with a 10-point deduction after they entered administration. That means they will slide to second from bottom in the standings, one place above Chester, giving Chester a massing boost of survival should they overhaul the massing 25 points deduction imposed on them.

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Chester City Football Club’s demise seems to be nearing a disaster as long suffering Blues fans suffered another shocking piece of news.

The club, relegated from the football league at the end of 2008-2009 campaign soon entered administration and an immediate ten point deduction was imposed by the football conference.

Now, with less than two weeks before the start of the new season, Chester City could find themselves in a different league or without a football club at all.

In the latest twist, the HMRC have challenged Chester City’s refinancing agreement, and won the case in a court of law.

The press statement published on the club’s official website read “Chester City Football Club Ltd in administration press release On the 8th July 2009 in the High court of Justice, Chancellery Division in Manchester, HM revenue and Customs (HMRC) filed an application challenging the approval of the company voluntary arrangement (CVA) which was originally approved at a meeting of creditors held on the 11th June, 2009.

At a hearing held in the Manchester High Court and concluded today His Honour Judge Pelling QC ruled in favour of the application by HMRC in respect of a debt owed by Chester City Football Club Ltd to a connected creditor and revoked the approval of the CVA.

Martin Shaw of Refresh Recovery Ltd, and the administrator in this matter stated that the decision by the Court, on the application of HMRC, is a setback to the new owners of the club.

However, we are actively talking with the Football Association in relation to the impact that this decision will have upon the transfer of the membership to the FA.

The new owners and I are working with the Football Association to ensure that the club can commence playing matches when the new season starts on the 8th August, 2009.

Further communications will follow when appropriate. For further information please contact Refresh Recovery Ltd, Martin Shaw/Bill Brandon on 01695711200 or Turner Parkinson Solicitors’ Will Jones on 016 1833 1212.”

What next for the soap opera that appears to be Chester City Football Club??

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