ICSM Business News: full time whistle blows for another football club after Scunthorpe United FC is served a winding-up petition
By Harry Mottram: The taxman has caught up with Scunthorpe United FC over an alleged unpaid tax bill. HM Revenue and Customs have served a winding-up petition which could spell the end of the National League club founded in 1899.
The club had been up for sale as is lies at the bottom of the fifth level of the football pyramid and a deal was announced before Christmas but it has yet to be signed off. The Iron were relegated out of the Football League after 72 years last season and are bottom of the division.
Begbies Traynor have been trying to find a buyer and to secure the club’s future but with what is assumed to be a huge unpaid tax bill speculation amongst fans is the club will phoenix and start again in a lower league. What will happen to its assets and in particular the Glanford Park ground is open to speculation.
Ian Carrotte of ICSM said it was a familiar story of a club with poor credit management – when instead all clubs should be run as a business and live within their means. He said: “Too often people with egos take over clubs – they frequently have no financial experience that is relevant to the job. The losers are the suppliers who are often left unpaid – the players and staff – and the town or city who can end up losing one of the organisations that puts them on the map.”
In the past there is a long list of football clubs that have gone bust and, in most cases, have done a phoenix and reformed – and in some cases dumping the debts that caused their demise. Ian Carrotte said suppliers to clubs must not get caught up with the emotional ties to a club allowing their support for the team clouding judgement when it comes to granting credit. By their nature clubs are supplied from a huge range of firms who can get stunk if the business hits the rocks.
Those with long memories will recall how Accrington Stanley folded in the 1960s – although the club was eventually reborn. These are some of the clubs in England and Wales that have gone bust in the past and then returned after being reconstructed:
Bradford City in 1983, Charlton Athletic in 1984, Middlesborough in 1986, Tranmere Rovers in 1987 and Newport County in 1989. In the 1990s Walsall, Northampton Town, Kettering, Aldershot, Maidstone, Hartlepool, Barnet, Exeter, Gillingham Doncaster, Millwall, Bournemouth, Crystal Palace, Chester and Portsmouth all entered administration or applied for a CVA to survive – in this century Hull, QPR, Bury, Halifax, Bradford, Notts County, Barnsley, Leicester, Port Vale, York, Derby County, Ipswich, Wimbledon, Oldham, Darlington, Bradford City (again), Wrexham, Cambridge, Rotherham, Crawley, Boston, Leeds, Luton, Bournemouth, Rotherham, Halifax, Darlington, Southampton, Stockport, Chester, Northwich Victoria, Farsley Celtic, Salisbury, Weymouth, Crystal Palace (again), Portsmouth, Plymouth, Rushden and Diamonds, Darlington(again), Portsmouth (again), Port Vale (again), Aldershot (again), Bolton, Bury, Rhyl, Wigan, Bury (again) and Derby County (again).
In Scotland the same situation saw these clubs also hit the rocks in this century: Queen’s Park, Greenock, Clydebank, Airdrieonians, Motherwell, Dundee, Livingston, Gretna, Livingston (again), Dundee (again), Rangers, Dunfermline and Hearts.
Glasgow Rangers hit the rocks in 2012 when the club went into administration when debts hit £168.9 million pounds. More than half of the debt was to the taxman – but the list of unsecured creditors included the corner shop by the Ibrox ground (£567.45), a face painter called Susan Thomson (£40), the police £51,882 and the ambulance service £8,438. And they also owed other football clubs a total of £3.3 million pounds – a shocking list of creditors.
Ian Carrotte again stressed suppliers to be especially cautious when granting credit to sports clubs as they so often trade off the notion they can never go bust. The opposite is true when you look at the list of insolvencies.
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For details about ICSM Credit call 0844 854 1850 or visit the website www.icsmcredit.com or email Ian at Ian.carrotte@icsmcredit.com on how to subscribe and to join the UK’s credit intelligence network to avoid bad debts and late payers. Follow ICSM Credit on FaceBook, Twitter and YouTube and Ian Carrotte on LinkedIn.
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For details for the work of the journalist Harry Mottram visit www.harrymottram.co.uk