An Unhappy New Year At Darlington

By on Jan 2, 2012 in Finance, Latest, Non-League | 0 comments

A new year may have begun, but familiar problems are already starting to make themselves clear with conflicting stories concerning the well-being of Blue Square Premier club Darlington. A club that has already had two spells in administration in the last decade could well be headed for further trauma following reports in the local press during the break between Christmas and the new year, but upon what were these initial reports based, and can a consortium group which has since announced itself get the assent of the club’s current owner to take over a football club that has been shipping money left, right and centre for longer than most people care to remember?

It was on the twenty-ninth of December that the Northern Echo dropped a wearyingly familiar bombshell on the club’s long suffering support in the form of a story titled “Singh To Put Darlington Football Club Into Administration, Sources Claim”. It stated that the players were not going to be paid in full for December and that the players “have been told to prepare for administration”. The timing of the story was curious, if nothing else. Owner Raj Singh had been out of the country on business, and the club itself could only reply with a cursory public statement which will have done little to allay the fears of the more pessimistic element of the clubs support.

Who, though, was the local paper’s source for this story? The article itself gave nothing away, although it did lean heavily on the Twitter accounts of the clubs players, who were understandably unhappy at the news that they were not to be paid. The club’s statement, which was the first official communication from the club over its financial circumstances for some time, was fell short of what might be expected of an official club statement. What else, we may well ask, are they to make of a statement which says only that a further statement will be made apart from to reach the conclusion that something is very, very wrong at the club? We know for certain that a transfer embargo has been in place at Darlington following the club’s failure to pay wages in full at the end of November. For how much longer, we can only ask, can this situation be allowed to continue?

The problems at Darlington are long-standing. The club left its previous home at Feethams in 2003 for what is currently known as The Northern Echo Arena, and the folly of the construction of such an inappropriate home for a club of its size has been a common theme over the last eight years or so. Two of the club’s creditors, Philip Scott and Graham Sizer, took ownership of it last year with the club continuing to play there under the terms of its existing lease, which has thirteen years left to run on it. This arrangement, however, is understood to be dependent upon Singh remaining at the club. Singh, though, is believed to have put £3m into the club over the last three years in order to keep it afloat, although this has been disputed by some. If we presume it to be something close to an accurate figure, though, for how much longer could he ever have reasonably been expected to keep funding such losses?

All of this might have been considered to be putting the club in something of a Catch-22 situation, but this hasn’t stopped an announcement of the formation of a group which is hoping to save the club. Yesterday, an official statement came from The Darlington Football Club Rescue Group (DFCRG) which indicates that there may now be a group which can take the club over. The statement in full can be seen here but, in short, its aim is “to ensure the continuity of Darlington Football Club, in a sustainable manner”, and has been formed as a consortium involving “a mixture of individuals, local businesses, the Supporters Trust and the public”, with “a maximum percentage of shares permitted for any one shareholder.”

All of this sounds laudable and desirable, but these plans may well be dependent upon one thing that may prove more difficult to guarantee – the goodwill of Raj Singh. The consortium cannot start running the club until an estimated date of July this year, and will be “dependent upon the generosity of Mr. Singh, and his willingness to maintain the Club until July 1st 2012″. The critical question, therefore, becomes a simple one: will Singh, who has been showing signs of being very keen to leave the club for several months now, be interested in a plan that requires him to pour even more money into the black hole that is the club’s accounts for another six months? In November, Singh indicated his desire to renegotiate players’ contracts, and what the incentive for him to keep putting money into the club until the summer would be, apart from goodwill, is far from clear.

Entering the club into administration would not seem to be a terribly sensible move for Singh to make, though. A ten point deduction would only drop the team by three places in the league, but it would put them at the cusp of a relegation battle, and Football Conference rules state that any club which enters administration during the course of a season must pay all creditors in full by the second Saturday in May. The prospect of expulsion from the Football Conference into the Premier Division of the Northern Premier League at the end of the season (as happened to Salisbury City at the end of the 2009/10 season) would not be a particularly enticing one for anyone looking to invest in Darlington FC, and control over its future would be passed from Singh to the administrator. It may also be worth bearing in mind that a third spell in administration could only be regarded as a big closer to the closure of the club. When, we should perhaps ask, will this cycle of debt and insolvency end for the club?

For now, though, the future of the club – both long-term and short-term – appears to be completely up in the air. The long-term viability of the club can surely only be guaranteed by leaving the Arena, but this has to take second place for the time being in comparison with ensuring the club’s survival for the remainder of this season and through the summer. With the rescue consortium containing the club’s supporters trust, it would make sense for supporters to join it now. The team remains, in spite of their home defeat at the hands of Gateshead yesterday, in touch with those chasing a play-off place for the end of this season, but short and long term survival off the pitch are considerably more important than anything that happens on it at present, and persuading Raj Singh that he should stay at the club until the summer certainly seems likely to be a challenge for DFCRG, to say the least. If this hurdle can be overcome, then the future of Darlington FC can be secured. Whether it can be or not, however, is another question altogether.

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