Forty-Eight Hours To Save Lewes Football Club

Forty-Eight Hours To Save Lewes Football Club

By on Jan 10, 2010 in Finance, Latest | 4 comments

When the players of Blue Square South club Lewes take the pitch at Aggborough against Blue Square Premier club Kidderminster Harriers in the Second Round of this year’s FA Trophy, they will do so with the knowledge that the match could be their last. The club faces a third winding up order at the High Court on Wednesday morning over an outstanding tax debt of £48,000, and the very fact that this is their third appearance at the court doesn’t bode particularly well. There is no finite number of occasions that insolvency proceedings heard at court can be deferred, but the likelihood that they will be able to persuade a judge of the merits of allowing them to continue to trade drops with every case.

Yesterday, the club put a statement on its official site which seems to outline the seriousness of the situation. The statement came from manager Steve Ibbotson and was stark in the clarity of the language that it used:

The club faces an HM Revenue and Customs winding-up petition for outstanding monies of £48,000. The case has been adjourned twice since the summer to allow more time to pay off the original £110, 000 debt, during which time the club has been paying £10,000 per month.

However, it has been indicated that no more time will be given and that the remaining debt of £48, 000 now has to be settled in full otherwise Lewes FC will be wound up.

Lewes Football Club (LFC) is appealing for anyone who has previously shown an interest in helping the club, or any potential new investors, to contact the club as soon as possible in order to ensure the club’s survival.

The only way that LFC’s future can be secured in something like its current form is to settle the debt before the hearing. The club has made a number of positive, organisational changes this season which will help in future and without the threat of the winding up order, planning for the future could fully get underway.

LFC are appealing to interested supporters or investors who are willing to make financial loans or donations in order that the outstanding debt can be paid in full.

The full statement can be see here. At this stage, and in this economy, what is the likelihood that they will be able to raise the money required by Wednesday morning? Lewes, ultimately, is a town of just 16,000 people and with a considerably bigger club in Brighton & Hove Albion just up the road. It seems difficult to believe that a knight in shining armour will appear on the scene this late in the day. Not this time.

How, though, did they come to be in this position in the first place? The answer, of course, is years of mismanagement and overspending. Their promotion into the Blue Square Premier in 2008 was accompanied with a creeping sense that something was very, very wrong at the club. Manager Steve King was informed that his services would no longer be required during the week before their final match of the season against Weston-super-Mare, a match that was played against a backdrop of a most peculiar atmosphere – probably the first time that a championship trophy has been awarded with the supporters of the new champions more likely to invade the pitch in protest than in celebration.

Their single, solitary season in the Blue Square Premier was an unmitigated disaster. A trip to The Dripping Pan in January 2009 showed a club that seemed to be in disarray both on and off the pitch, with the bar closed and a team that had been decimated during the previous summer simply unable to compete with the professional clubs that they were up against. Their first winding up hearing came in March 2009, and their relegation back to the Blue Square South was rubber-stamped not long afterwards.

They were back in court in August and survived again, but the Blue Square South has proved to be an unforgiving environment. Lewes had to wait until the end of October for their first win of the season (a 2-1 win against Bishops Stortford), with a defeat at Wealdstone in the Third Qualifying Round of the FA Cup having already cost them the possibility of thousands of pounds’ worth of prize money in that competition. Their form has improved somewhat since then, including an extraordinary 6-2 win against championship chasing Dover Athletic on Boxing Day. They currently sit in third from bottom place in the Blue Square Premier, but they are still in touch with the clubs above them for the time being.

Whether they will be in touch in a week’s time or not, however, is a different matter. There are two ways that the club could avoid being wound up on Wednesday morning. The first would, obviously, be to pay the remaining £48,000 owed to HMRC by the time of the hearing. Unless a benefactor of some sort is willing to step in, however, this seems unlikely. The second is try to thrash out another agreement to try and clear the debt over a period of time. Whether this would be agreed at a third winding up hearing is open to question. Because the winding up order has already been presented, it seems unlikely that the club will be able to enter into administration and receive protection from being wound up this way.

Those looking at the situation from the outside may be under the impression that £48,000 isn’t a massive amount of money, but this is largely irrelevant at the moment. Kings Lynn were wound up a couple of months ago over an outstanding tax debt of £67,000. If Lewes can come through this, there is little to suggest that they can’t make a decent fist of staying in the Blue Square South this season. For now, though, we can only keep our fingers crossed that some sort of resolution can be found before Wednesday morning. That trip to Kidderminster on Tuesday evening may turn out to be a wasted journey otherwise.

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    4 Comments

  1. Sad to think that a club founded in the same year as my beloved Luton Town could be wound up for owing less than what some Premiership players earn in a week. Sadly letting Steve King go seems to have been the start of the rot. A very strange decision, I can’t remember hearing of a championship manager being let go in this way before. Any Lewes fans out there who can let us know what the board were thinking?

    Micky F

    January 11, 2010

  2. “…letting Steve King go seems to have been the start of the rot.”

    I think the rot had well and truly set in by that point – as the article points out the club effectively reached the Conference by overspending and not managing its budget correctly, culminating in the crisis point of Steve King leaving, and subsequently the problems with HMRC. As ever with situations like this I have the utmost sympathy for the fans, but ultimately the crisis was brought upon the club by its own actions, and that reason alone stops me reaching in my pocket for the inevitable virtual bucket collection.

    Simon Cope

    January 11, 2010

  3. The board knew they had allowed King to overspend, and tried to rein things back using local players and a lower budget. The owner could no longer afford to bankroll the club with an end of season cheque.

    Predictably, Lewes were found out on the pitch, and an early cup exit (to Leiston) meant that financial salvation from prize money was lost.

    The club was really insolvent at this point, and should have entered administration once an appeal for new investors fell on deaf ears.

    They have chosen to defy logic and soldier on, and cut back on expenses going forward so that they are not continuing to sustain further losses. The team is largely made up of youngsters from the U18 side.

    The real problem is the historic debt, and no means of reducing it quickly enough to a realistic level. Debts to HMRC are only a fraction of the total owed, the majority of which is “soft debt” to the companies of the owner.

    He has been reluctant to write off any more of that debt (he has written off some of it), and potential new investors will not put money in with these considerable liabilities on the company books.

    The company has no real assets other than the facilities, but the stadium is leased from the local Council. Two of the players are worth money in the transfer window, but someone has to be willing to buy them, and with the present position of the club it is not a sellers market.

    Peter M

    January 11, 2010

  4. County/lower Ryman League side get bankrolled up the pyramid to spend one glorious season in non-league’s top flight then go bust shortly afterwards.

    Seen it all before, sadly.

    Martin

    January 11, 2010

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