Chester City’s Administration & Stephen Vaughan

Chester City’s Administration & Stephen Vaughan

By on May 18, 2009 in Finance, Latest, Non-League | 13 comments

There are some football clubs that seem to be in a perpetual state of flux and crisis. One such club is Chester City where, over the last two decades or so, there has been mismanagement on such a grand scale that one wonders how unlucky a club can be to have run into such problems so regularly. Chester have already been relegated once from the Football League and won promotion back, but they were relegated again last season and it seems unlikely that they will be able to repeat the trick. With the club’s current playing staff reportedly down to single figures and an embargo brought in by the Professional Footballers Association meaning that they cannot sign experienced replacements, their outlook looks bleak. The major question now is exactly how bleak this future will be.

The club went into administration at the end last week, the final chapter in an agonising season during which they were the worst team in the Football League (they were kept from bottom place by Luton Town’s thirty point deduction). There is, however, a wider issue at stake here regarding the Football Association’s rather limp definition of who may be defined as being “fit and proper” to run a football club, since the club’s chairman, Stephen Vaughan, has a little bit of “previous” with regard to the mismanagement of football clubs. Supporters of Barrow AFC (who Chester may or may not – more on this shortly – be playing in the Blue Square Premier next season) may be forgiven for saying “we told you so”.

Vaughan is a boxing promoter from Merseyside, and became involved at Barrow in the mid-1990s. Initially he was successful, and the club won promotion to the Football Conference in 1998, but Vaughan resigned as chairman after an investigation by HMRC into money laundering and his links with the Liverpool gangster and drug trafficker Curtis Warren. He reinstated himself when he was cleared of any involvement (it was said at the time that he had used security provided by Warren at his boxing events and acted as a middle man in his property deals, but drew the line at money laundering), but Barrow were already said to be in serious financial difficulties and Vaughan resigned as chairman and removed his financial backing in November 1998, although he retained his shares in the club.

Barrow were liquidated in January 1999 (a new company, Barrow AFC (1999), was formed in its place) and were demoted back to the Unibond League at the end of that season, but their problems were only just beginning. They almost didn’t start the following season (indeed, they started the 1999/2000 season a month late), but this was a comparatively small problem next to the fact that Vaughan had transferred ownership of the club’s Holker Street stadium into the name of his company, Vaughan Promotions, as repayment for the money that he had poured into the club before this money ran out. The liquidator Jim Duckworth, however, smelled a rat and took him to court over it. In 2002, Holker Street was returned to the liquidators, who sold it back to the new directors of the club for £265,000.

Vaughan turned up at Chester City in 2001, but immediately ran into controversy again when Chester were drawn to play Barrow in the FA Cup Fourth Qualifying Round. Since Vaughan still owned shares in Barrow, the FA threatened to expel both clubs from the competition, but Vaughan sold the shares in Barrow for a nominal sum to Bobby Brown, a painter and decorator, for £1 a couple of days before the match. He bought them back after the match (which Barrow won 1-0) and then sold them to the directors of the new company for £29,500, but his links to the club weren’t fully severed until the court found against him over ownership of the ground. The FA’s handling of the matter was widely criticised at the time, and it is a reflection upon the weakness of the rules regarding club ownership that Vaughan has remained in charge at Chester without censure.

Vaughan’s time at The Deva Stadium hasn’t been without controversy. On the pitch, the Chester were successful again – having been relegated from the Football League in 2000, they were promoted back in 2004 – and Vaughan also oversaw improvements to their facilities. However, in February 2007 he was charged with violent conduct by the FA following an incident in the players tunnel after a match against Shrewsbury Town. In November of that year, the club held a minute’s silence for one Colin Smith, who was announced by the club as “a major benefactor” to them. Afterwards, however, it became clear that Smith was nothing of the sort – rather, he was the right hand man of Curtis Warren, and had been murdered outside a gymnasium in the Speke area of Liverpool in a gangland hit. Vaughan resigned as chairman shortly afterwards, but remains as the club’s owner and a majority shareholder. In January 2008, he was charged with fraud and deception in relation to car finance, and was cleared.

In March 2009 and with Chester sliding out of the Football League again, it was announced that Chester had sold out to Liverpool based property developer Gary Metcalf. Metcalf (whose son, and you may need to read between the lines here, is a Liverpool-based boxer) was all but announced to have bought the controlling stake in the club, but at the start of April Chester supporters established that ownership of the shares had instead passed from Stephen Vaughan into the name of his son, Stephen Vaughan Junior, a twenty-four year old that had played fifty-eight times for Chester. Vaughan Junior had made seventy appearances for Liverpool reserves, but it would be stretching credibility somewhat to suggest that this would give him the means to run the club. Metcalf, who may or may not be linked to the Vaughans, is still said to be interested in the takeover of the club, but this has so far come to nothing. Vaughan Senior is believed to have said that he is owed between two and four million pounds by Chester City.

What, then, does all of this mean for Chester City? Well, the involvement of the administrators could be good news for the club. If the Supporters Trust can lobby them stating that it is in the best interests of all concerned that the club’s ownership is passed to them, they could theoretically take it over. It isn’t, however, that simple. If, as many believe, the transfer of ownership of Chester City into Vaughan Junior’s name was to ensure that Vaughan Senior didn’t get an administration marker against his name when the club were declared insolvent, then it could be more complex than that. Indeed, if Vaughan Senior is the club’s biggest single creditor, then he will hold the ace hand in dealings with the administrator, and he may simply inherit the club again with its debts wiped clean.

Chester supporters’ best hope comes in the form of the authorities. The FA is a broadly different beast to the one that allowed him to run roughshod over their own rules regarding club ownership in 2001, and the Football Conference are notoriously tough over insolvency. They have it within their powers (in a way that not even the administrators do) to shape the destiny of Chester City Football Club. The Football Conference has an agreement with the Football League that it will accept two relegated clubs per season, but they relegated Boston United straight into the Blue Square North and then into the Unibond League because of financial irregularities. Certainly Vaughan Senior’s previous run-ins with the game’s authorities and his associations outside of the game are unlikely to engender much sympathy within those running at the game. At best, Chester will start next season ten points behind everyone else, but things could yet turn out to get much, much worse for them before they get any better.

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    13 Comments

  1. Why oh why are people like Stephen Vaughan allowed to run a club ? surely its time for the FA to act for the sake of the game/

    Dave Smith

    May 18, 2009

  2. If you look at the Observer for May 18th 2008 (article by Mark Townsend ) you will see that Colin Smith’s demise was not a routine gangland killing, he was allegedly murdered by a hitman sent by the Colombian cartel as he allegedly owed them a lot of money.

    Ironic that our great hope as a striker , Paul Taylor, signed at the beginning of the season from Vauxhall Motors should get sacked for failing a drugs test (allegedly Cocaine ) and rumours persist of another Chester player failing a drugs test at the same time.

    John Charles

    May 18, 2009

  3. Well done on pulling together a lot of the strands that a few of us have been doing our best to publicise for a long time. Of course most of us think this is only the tip of the iceberg and can only guess at the scale of the real story. For example there is nothing in Stephen Vaughan’s business career that even points at legitmately making a fortune of greater than £4 million – the sum he’s supposed to have invested in Chester City. All that can be seen is a litany of corporate failures.

    Of course none of this has ever been adequately investigated by the FA or the Football League. In a world where people like Stephen Vaughan don’t suffer only the fans for the subsequent failures this is surely a disgrace.

    Mick Chagnet (Posh)

    May 18, 2009

  4. the last decent and honest chairman we had was ray crofts..since then we have had Gutterman.the mad yank and the shall I say dodgy S.vaughan.Does the club have a future?In these severe fianicial times.who will buy an ailing non-league team?35 years man and boy I have followed Chester City.Plymouth,Ipswich,Newcastle,Boro,Kingstonian,Forest Green…The club is a joke.What we need is a complete blank sheet of paper and start all over again!With season tickets announced and M.Wrights 20 man list of players,who are the club trying to kid.It hurts to see my club in so much turmoil.What really surprises me is Bob Grays startling rise within the club fron boot man to director/The club is corrupt,we the fans need answers to all are questions.Who owns Chester City f.c,what leaue will we be playing in next seasonWill S.vaughan leave and run another football club into oblivion?

    a.p.trotter

    May 19, 2009

  5. Cannot see why you have any faith in the FA suddenly doing the right thing. The “fit & proper” rule is a joke – if a drug fuelled clone of Hitler ponied up with finance from Al-Qaeda and Gary Glitter as his youth team coach he’d still get the nod from the “guardians” of our game.

    M. Francome

    May 19, 2009

  6. Football is full of people like Stephen Vaughan who have not actually broken any laws and thus are almost impossible to prevent.

    It will continue to be so whilst most fans refuse to take more responsibility for the ownership and running of their supposedly beloved clubs.

    Martin

    May 19, 2009

  7. Why is this man so evil, he ruined Barrow FC & now he’s trying to ruin Chester City

    the guys an idiot.

    Nathan

    May 19, 2009

  8. Wasdvised about him from player at barrow, but Chester fans got carried away thiking he was the saviour…now they recognise his true side.
    The FA aren’t interested in fans issues sadly…jst feather their own nest. The one person who fans could loob is Sir Trevor Brooking, who does care abouthe game and the fans. Alos fans could by pass the FA and approach the PFA who reperesnt the players interests. Lets face it what has happened at Chester FC has affected many players.
    A sad state of affairs. What motivates people to destroy something good?

    tony arnold

    May 20, 2009

  9. “Vaughan sold the shares in Barrow for a nominal sum to Bobby Brown, a painter and decorator, for £1 a couple of days before the match”
    While this seems like a strange thing to do, it was, of course, his prerogative.

    Matt Kelly

    May 20, 2009

  10. Fit n Proper person my Arris.

    The FA need to change the rules and pronto, these dubious ” business men ” know how to flout the rules as the rules are made by upstanding men who dont think in a sinister way, Any new rules should be made by a poacher come gamekeeper type so they would be much harder to manipulate.

    This man has many failed business to his name, why dont you start there by ststing that anybody with 2 or more failed enterprises can not hold a position in a Sports club?

    First Barrow AFC now Chester City who’s next ? He was trying to get his tenticals into Everton last season.

    Barrow managed to survive by the community rallying around to fund our financial shortfall, Chester may not be so lucky.

    Mike Wilson

    May 21, 2009

  11. I really liked mr. Vaughan everyone i know calls me BABY but mr vaughan always called me MR.BABY

    Dave Ayres

    May 21, 2009

  12. Terrible to see this happen to any club and I feel very sorry for their real fans.
    However, I recently watched the Chester v Darlington game and would like to point out that during the game a section of Chester’s support took great pleasure in mocking Darlingtons troubled fans with chants of “going bust. etc”.

    All I would say is, what goes around comes around.

    Jonah Mann

    May 21, 2009

  13. How many leagues have chester been relegated? Have they had to change there name?

    Ann Jacques

    August 15, 2009

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