Merthyr Most Foul

By on Aug 20, 2008 in Finance, Non-League | 0 comments

Football club implosions can take several different forms, to the point that it is is probably fair to say that there is no one route to insolvency. Sometimes, mere spending beyond one’s means for a season is enough to have grim long-term ramifications, as happened to Bradford City, who are still paying the price for former chairman Geoffrey Richards and his “six weeks of madness” a decade ago. Sometimes, it’s trying to live in the fast lane and propping up the shortfall with more and more unsustainable (and unfathomable) loan agreements, as Leeds United experimented with so disastrously and Manchester City may be about to embark upon. Occasionally, however, insolvency creeps up on a club over a period of years – decades, even. It appears like rust, innocuous enough at first, but if it takes hold, it starts to corrode from within. You might not even notice it at first, but it’s there, eating away until, just occasionally, the whole edifice that it has invaded collapses.

So, then, to Merthyr Tydfil AFC. Merthyr Town were founded in 1909 and were voted into the Football League when it expanded to four divisions in 1920. They fiinshed eighth in the all-new Division Three (South) and lasted ten years in the League before dropping back into the Southern League, from whence they came, in 1930. They folded in 1934. Merthyr Tydfil AFC were founded in 1945, and were six times winners of the Southern League, getting promoted into the Football Conference in 1989. They spent six years at the top of the non-league game, finishing in ninth place twice before managing a best ever fourth place finish in 1992, before the Southern League came a-calling again two years later. They also, in the era during which Welsh clubs entering into English league competitions were allowed to enter it, won the Welsh Cup three times. After the last of these wins, they achieved possibly their best known result, beating Italian club Atalanta 2-1 in the European Cup Winners Cup First Round First Leg before losing the return match 2-0 and going out.

Since the mid-1990s, though, the rust has set in at Penydarren Park. A history of looking with optimism at being able to, maybe, secure a place in the Football League became a meagre subsistence existence, but at least their club was still there. Last season, they only narrowly avoided relegation from the Southern League Premier Division, but they made the Fourth Qualifying Round of the FA Cup before losing to Oxford United. However, the club has run up very high debts – £500,000 as of 2006 – which have threatened the club’s ongoing survival. The poisonous atmosphere within the club appears to have spread to those running the club. The club banned the chair of the Martyr’s Trust, David Webb, from Penydarren Park last year, and appears to have done so again in the light of recent events at the club.

The most recent crisis began with an announcement that HMRC had brought a winding up order against the club last week over an unpaid £20,000 tax bill. The Trust, which has been pouring money into the club for a couple of years, submitted an offer to take over the running of the club, but this immediately ran into problems. For one thing, this year’s accounts have not been submitted yet to Companies House, so it is impossible to gauge exactly what the extent of the club’s difficulties are. Rumours have varied the amount from in the region of £250,000 to over £500,000.

Secondly, the club appears to be openly antagonistic towards the Trust. Its reaction to the offer submitted by the trust was to return the envelope unopened and ban Webb from the ground again. The club stated the “proposal came as a complete shock to the Board of Directors of the club”. Having had the trust pay many bills for several years, they seem to want this arrangement to continue, with a supporters trust that has no confidence in the people running the club for no return. The Trust’s requirements in terms of shares had been increased from 25% to 51% upon legal advice (unsurprising, considering that part of the deal was for the new board to accept liability for the club’s debts), and Wyn Holloway, the owner, baulked at such a suggestion.

Once again, then, a power play is taking place with a trenchant board who seem to be more interested in keeping control of a rotting shell of a club than with acting in a positive way to reinvent the very club that they are supposed to represent. The Martyrs’ Trust wants to reinvent the club as a community club. As they said in a press release filled with barely suppressed rage:

It is time to end the culture of living hand to mouth, of only just getting by. The fans and community of Merthyr deserve better. When we look to the likes of AFC Telford United, in the hands of the fans and thriving, we know that it’s possible.

As things stand, it is likely that the immediate crisis can be staved off. The debt to HMRC is a comparatively tiny one, though the rumours that the club’s accounts haven’t been submitted because they couldn’t afford to pay the accountant to do it are worrying. On the pitch, a demoralised Merthyr side have lost their opening Southern League fixtures 4-0 and 4-1, but events on the pitch are the least of their concerns. If the Limited Company that owns the club is wound up, whether there will be a Merthyr team to support in a couple of weeks becomes a valid question. Wyn Holloway and his fellow directors should admit that they have, ultimately, failed Merthyr Tydfil AFC, and should pass the ownership of the club over to the Trust, so that they can rescue something from the ashes. The alternative might just turn out to be the end of senior football in the town for a second time.

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  2. Subbing the club or the owner? « Football Management - [...] the timing of it), and it is from Administration that the Trust plan to resurrect the club. (See [8] …
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