Clubs struggling in the current financial crisis by Tom Davies

The financial crisis has inevitably brought with it a swirl of speculation about how football clubs will cope with the first recession since the Premier League breakaway, but given the messes so many got into during the boom years it’s tempting to wonder whether we’ll notice much difference. But there’s no doubt many will find life more precarious.

In the Premier League this has certainly contributed to the uncertainty surrounding Portsmouth, whose finances have been cast into the spotlight since Harry Redknapp’s flit to Tottenham. Pompey are more than ­£30 million in debt, owner Alexandre Gaydamak is reported to be struggling to find a buyer and, with a wages-to-turnover ratio reported to be more than 90 per cent, there is cause for anxiety. The club themselves robustly dismiss any talk of crisis – “It’s a boring, boring subject. The club is fine. Move on,” executive chairman Peter Storrie says – but player departures and downsizing look increasingly probable, in the absence of a well funded buyout. Much will depend on the smooth progress of the move to a new 36,000-seat stadium at Horsea Island, but that isn’t due to be complete until 2011. The club also lack organised supporter input – grassroots involvement is something of a rarity in the top flight, perhaps in part because of the scale of Premier League clubs’ finances.

The collapse of the property market will affect clubs who have tied up their future plans with ground sales and redevelopment, and is likely to be felt more acutely lower down, such as at Conference strugglers Grays Athletic. Having challenged for a place in the League in recent years and won the FA Trophy twice, Grays’ priority is now staying up and staying afloat. Chairman Mick Woodward last month asked players to take a 50 per cent cut in wages, after three major sponsors ended their involvement with the club, while a proposed ground move has stalled.

Woodward was also manager for seven months until September, stepping down at the same time as he put the club up for sale. First-team coaches Tim O’Shea and Neil Smith soon departed, and Wayne Burnett is now in charge of the footballing side. With Grays deep in the relegation zone, relations between supporters and Woodward are becoming strained – earlier in the season the chairman blustered that he’d shut the club down if fans didn’t stop barracking him. New chief executive Tony Turburville, formerly at Kettering and Farnborough in rocky times and brought in by Woodward to “restructure the club”, has also taken the unusual step of establishing a top-down ­supporters’ trust.

How the state of the property market affects the Essex club’s attempts to relocate from the New Recreation Ground (which is registered under the ownership of FC Stark Ltd, a Kent-based developer) will be worth keeping an eye on. Grays are looking to move out to a new stadium in the Thurrock Sports Hub complex and will look to vacate their existing home, but concrete plans are yet to emerge. The future looks uncertain.

Grays aren’t the only club where officials are seeking to set up and control their own fan organisations. Directors of Merthyr Tydfil have established a new supporters’ club following a fall-out with the supporters’ trust amid the turmoil of the Martyrs’ recent ­winding‑up order – a stand-off that has resulted in the banning of trust chairman David Webb from Pennydarren Park. Webb had refused to hand over trust money wanted to pay off an unpaid tax bill of £20,000 from 2005, which was the ­cause of the ­winding‑up order. Club chairman Wyn Holloway had requested £28,000 from the trust, which regularly provides funds for team operations, offering it 25 per cent of shares in exchange for repayment of a number of short-term debts. However, the trust took legal advice and made a claim for all of Holloway’s shares (more than 90 per cent of those issued), given that its previous shareholding was found never to have been registered. “The trust needs to have some reserves for when we might really need it,” Webb says.

And well it might. The board found the money to stave off the most recent winding up order – “We called their bluff,” Webb says – but it is unlikely to be long before cash demands return to haunt Merthyr, who are thought to be saddled with around £500,000 of debt; no accounts have been filed with Companies House for more than two years. Yet prospects of alternative ownership look distant. As Webb says of the club board: “They’re simply not very professional at running a football club, and at the moment they’re not even looking for buyers. The directors realise they’re not going to get their money back.” Against the odds, the team have made an excellent start to the season, despite the drip of financial and player losses. “A lot of the players have come through the very youth teams we formed and funded,” says Webb, who remains unable to see them for himself at home games. 

From WSC 262 December 2008

Related articles

How To Be A Footballer by Peter Crouch
Ebury Press, £20Reviewed by Huw RichardsFrom WSC 382, January 2019Buy the book...
Vince: The autobiography of Vince Hilaire
by Vince HilaireBiteback Publishing, £12.99Reviewed by Matthew BarkerFrom WSC 376, June 2018Buy the book...
There’s always last year ~ League Two 2016-17
Embed from Getty Imageswindow.gie=window.gie||function(c){(gie.q=gie.q||[]).push(c)};gie(function(){gie.widgets.load({id:'rtULZSwJTkV50bFyyyrccw',sig...

Sign up to the WSC Weekly Howl - a small portion of despair and enlightenment delivered to your inbox every Friday