Diminished responsibility

The disappearance of Chester City from our Saturday afternoons in 2010 highlighted the problems with the football authorities' safeguards for clubs. WSC took a look at what went wrong and what should be done to make sure it doesn't happen again

In the build-up to this year’s Carling Cup final, there were several mentions made of one of the biggest upsets in the competition’s history. This was in 1975 when reigning League champions Leeds were beaten 3-0 in the quarter-finals by Fourth Division Chester, who lost to Aston Villa in the semis. Two days before this year’s final, Chester were expelled from the Conference and have sinced ceased to exist.

It’s possible that two successor clubs will be created. The owners, the Vaughan family, who are also the club’s biggest creditors, may persevere with an entity called Chester. It also seems likely that a team run by supporters’ group City Fans United will restart several levels further down the pyramid where their fans will outnumber the opposition by a ratio of around 20 to one.

Most supporters learn to be phlegmatic about relegation, which is often brought about by a mixture of greed and incompetence. But it must be especially hard to bear when a club seems to have been allowed to drift into oblivion. We’ve been hearing a lot about financial mismanagement in the Premier League but Chester fans have been complaining for years about the way their club has been run – to no effect. What has happened to Chester, a club that had existed for longer than two of its giant neighbours, Liverpool and Manchester City, is an indictment of the football authorities and their failure to safeguard clubs.

Chester were doomed to drop straight through the Conference given that they began with a 25-point deduction, comprising two separate punishments for being insolvent and failing to agree a CVA. But almost every week of this season seemed to bring new humiliations, culminating in fixtures having to be scrapped because players hadn’t been paid.

There was also the curious episode of the aborted takeover by a group of Danish “fans”. Shortly before the club was voted out of the Conference, Palle Rasmussen, of the Chester Projekt, announced that he had agreed terms with the Vaughan family and made a point of disparaging City Fans United who he said did not represent the clubs fanbase (they have over 700 members at a time when Chester’s crowds average around 1,200). At the time of writing the owners’ new Danish friends have made no progress with their supposed takeover.

Stephen Vaughan, who took control of Chester in 2001, has had a long and varied business career. He stepped down from the club’s board last year after being disqualified as a company director over an alleged VAT fraud at the rugby club he owned, Widnes Vikings. This made him the first person in control of a club to fail the FA’s fit and proper person test, which applies at Conference level.

Vaughan’s son, Stephen Jnr, a former Chester player now with Northwich Victoria, subsequently took on some of his father’s former responsibilities while no doubt abiding by the requirement that a disqualified person can no longer maintain “direct or indirect control”. Further evidence that the football authorities’ background checks are thoroughly inadequate came when the League declared that the offshore owners of Leeds United met the required standards, in that they had no recent criminal convictions and had not taken a club into insolvency twice. But the identity of these publicity-shy entrepreneurs is only required to be made known to the League chairman and three other executives. Last summer the League also waved through Notts County’s new patrons Munto Finance who may have been based in Switzerland, or the Emirates, or someone’s garden shed, and who nearly brought the club to ruin in four lunatic months.

Although it was the County’s supporters’ trust who sold up to Munto, fan-run clubs are rightly seen as the ideal model. Three such set-ups, at Rotherham, Chesterfield and Bournemouth, are now contesting promotion in League Two. In general, however, there appears to be a lack of will to tighten up ownership rules because many clubs simply don’t want to leave themselves open to forensic scrutiny. But as a matter of urgency, the FA and the Football League have got to make their regulations more transparent.

Owners should be required to show precisely how much money they are putting into a club and taking out, while prospective buyers should prove they possess the funds for their takeover, even if it has to be stacked into piles lodged in a strongroom at Soho Square. Money in briefcases is, after all, a tried and tested way of doing business in football.

From WSC 278 April 2010