ICSM Business Membership Group: fighting late and non-payment – creditors left in limbo as Scottish Football Club enters administration as Ian Carrotte welcomes plans for an Independent Football Regulator to police club finances and directors

By Harry Mottram: Dumbarton FC in the Scottish league is currently in administration following a cash flow problem at the club founded in 1872. Financial advisors Quantuma of Glasgow have been appointed as administrators and now have their work to find a buyer or a solution that will keep the League One club going. As it is the players and staff will continue to be paid and the fixtures fulfilled as usual. The position of the suppliers is another matter. The problem of liquidity has been caused according to local reports when the club were owed £1.8m with a payment of £300,000 to the club not made - leading to speculation about the mystery of the missing money.

Scottish Football Association rules will almost certainly lead to a points deduction which would potentially cause the club to be relegated. That was the fate that Caledonian Thistle fell to as they went into administration earlier this autumn. And of course Dumbarton and ‘Caly Thistle’ of Inverness are not alone in their plight as there is along list of clubs that have gone bust but almost without exception they somehow rise again from the ashes due to the passion of the supporters. Already a rescue fund from supports in Dumbarton has raised around £90,000 while the administrators say they have ‘lots of interest’ in the club from potential buyers.

Last season in the lower leagues Taunton Town and Torquay hit the buffers while 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).

Back in Scotland there have been plenty of clubs that have gone bust only to be revived including Queen’s Park, Greenock, Clydebank, Airdrieonians, Motherwell, Dundee, Livingston, Gretna, Livingston (again), Dundee (again), Rangers, Dunfermline and Hearts.

Ian Carrotte of ICSM said that the usual business brains of those in charge of clubs seemed to have a blind spot compared to a non-sporting set up. He said: “When you look at the finances of not just football clubs but also professional rugby union clubs quite a number are technically insolvent. It’s only when the banks or lenders, or the taxman calls in their loans that things come to a head. Not only do the supporters lose out and the staff but creditors are usually the ones who are left with nothing.”

Due to the number of scandals around the collapse of football clubs leaving creditors out of pocket and fans sometimes without a club the Government has moved to introduce an Independent Football Regulator. The bill is now before parliament is likely to establish the new watchdog role next year. Ian Carrotte welcomed the plans as the alliance of football clubs called Fair Game who have also called for a regulator to police club finances and directors.

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