Gateshead FC: Fog on Tyneside

To say that this week has “turbulent” for Gateshead FC would be something of an understatement. For a brief period, it looked as though there might have been a way out of this mess for the beleagured (at the time) National League club. A supporter, it was confirmed, had purchased the club from disgraced former owner Ranjan Varghese for £25,000. Neil Pinkerton, a southern-based Gateshead supporter, had been registered as the sole director of the club, whilst Varghese and fellow director (and legal advisor) Michael Di Stefano were removed. It looked as though a most welcome – if unexpected – development might save the club and its place in the fifth tier after all.

Paperwork was drawn up and funds were reportedly transferred into Varghese’s bank account. The agreement was eventually confirmed the following lunchtime – less than an hour before Varghese was set to meet with the Football Association. The following day, the club had a further meeting, this time with the National League. We don’t yet know what the outcome of Varghese’s meeting at Wembley was yet. We do, however, know the outcome of their meeting with the National League, and it couldn’t have been much more of a disaster for the club. The National League’s subsequent statement reads as follows:

The National League can announce the outcome of disciplinary hearings concerning Gateshead Football Club.The club was charged with multiple breaches of the League’s membership rules, and was subject to a review of its financial position and an assessment of its club licence.

Gateshead FC has been found guilty of failing to obtain security of tenure over its ground, defaulting on football creditors, and breaching League rules concerning financial reporting and permitted loans.

The club has had 9 points deducted from its playing record for the 2018/19 season and been fined £3,500.

The National League table has been amended accordingly.

Furthermore, the club has been suspended from the competition and the League has refused the club a licence for the 2019/20 season.

Let’s break this down bit by bit, then.

Gateshead FC has been found guilty of failing to obtain security of tenure over its ground, defaulting on football creditors, and breaching League rules concerning financial reporting and permitted loans.

This is probably the least surprising news of the season. It only took a cursory look to see the extent to which the club was being wildly mismanaged. Not only that, but a lot of the hand-waving was coming from former players and staff, who spared no detail in describing exactly what was going on there. The club was evicted from its ground, so the issue of tenure is not even up for debate.

The club has had 9 points deducted from its playing record for the 2018/19 season and been fined £3,500.

Considering everything, hoping that Gateshead FC will cough up three and a half grand seems a little optimistic, but deducting nine points from them this season seems like a strange thing to do, when it doesn’t affect promotion or relegation in any way, although…

The National League table has been amended accordingly.

…this points deduction drops the club from ninth place to seventeenth place in the table, one place below local rivals Hartlepool United. It’s completely unsubstantiated, of course, but some have even whispered that this might not necessarily be entirely a coincidence. A light dusting of humiliation before the main event:

Furthermore, the club has been suspended from the competition and the League has refused the club a licence for the 2019/20 season.

And there’s the bombshell. That points deduction looks even more futile now, even more so the likelihood of Gateshead paying their fine to the National League, even though a failure to do so would almost certainly lead to suspension from all football. It all feels somewhat academic, when we consider it in comparison with the fact that the club has been expelled from the National League altogether. It’s not completely unheard of for this sort of thing in non-league, but it is exceptionally rare and, in this case, sends out a powerful message to clubs to get their houses in order.

We presume that was their intention, though whether they achieved it is debatable. They also likely aware of the criticism over their handling of this. “Chief Financial Advisor” (itself a title almost endearing in trying to imply a degree of CFO-ness even though he wasn’t allowed to be a director, like a little boy wearing his dad’s suit) Joseph Cala had failed the Owners & Directors Test when trying to buy Morecambe in 2017. He was quite clearly a shadow director and openly acting as one. He was even apparently acting as an agent for players when he felt like it, as well, at times.

The National League surely knew this, but didn’t act beyond placing a transfer embargo upon the club and insisting on a £200,000 bond being paid to them to start the season. Instead of being lanced, as should have happened, Cala festered within the club over the course rapidly deteriorating situation, as players and staff went unpaid, the club was evicted from its home ground, and the entire staff was laid off. Criticism of both the National League and the FA for not having acted sooner is entirely justified, but having said that it seems a little facile to suggest that there was anything vindictive about the National League applying all of these sanctions to a club that already really only exists in principle. And besides, what good comes from the punishing the new owner for the sins of the Varghese and Cala?

The answer to that is still not completely clear. What we do know for certain is that Neil Pinkerton’s name was on the Companies House register for less than twenty-four hours. Former general manager Alisha Henry was back, and had been expected to give the National League a budget and business plan for next season, while clarifying the position regarding the council-owned International Stadium, from which the club was evicted before the end of last season. The council allowed the club to play their remaining match of the season there, and it seems unlikely that there would be any issue with giving the lease to a new owner with ties to the club and a lot of goodwill on his side.

We also know that another director was put on the Companies House register on Monday – one Stefano Franciosa, who’d previously been involved as a coach at the Italian Serie D/A club Calcio Lecco 1912 in 2012. They took on a new owner while Franciosa coaching there – one Joseph Cala. His spell there didn’t last very long, with supporters protesting to rid of him, but he did reportedly tell a press conference – with Franciosa at his side – that he wanted €100,000 to leave, and that the cost would be €300,000 a week later. He was removed from the Companies House register two days later, whereupon Varghese was added again. He’s now reported to be back in Hong Kong now. What happened to Neil Pinkerton’s purchase is unknown, at the time of writing.

Supporters who’d already started planning for a new club after voting to break away to form a new one now head back to their original plan, but it’s difficult to say what the state of play will be regarding that at the moment, because this situation remains up in the air, albeit only to a point. The club has been “suspended” from the National League rather than “expelled” from it, and they have a right to appeal through the FA. It is seems unlikely that either the FA or National League will listen with much sympathy should any of Cala’s puppets pitch up for that, so new and confirmed ownership needs to be completed within days. Visible progress needs to be made.

At that point, the new owner can confirm their plans, and then plead for their lives to the FA. It’s possible that, as this has happened before this year’s National League AGM Cup (to be this held on the 8th June), the compromise of a division or two’s relegation could be a possibility. This, though, is almost certainly dependent upon Cala, Varghese and whoever else having left the club by then, and permanently. It’ll be cutting things tight to get a successful appeal wrapped up before that date unless the club changes ownership in the next few days or so. There’s no way of avoiding the feeling that, every time this sorry tale progesses, every chance of the club pulling through seems dependent upon something a little more unlikely happening than previously, and that these glimmers of hope cannot last much longer.

There will be a football club for Gateshead. If the current one can’t be saved, a new one will be formed. And if it can’t get into a league next season it surely will the year after. The sequence of events that led to the events of this week were entirely predictable from the moment that Joseph Cala and Ranjan Varghese pitched up at their clubs. Meanwhile, the inertia on this matter over the course of the season on the part of both the National League and the Football Association only strengthens the case for an independent regulator to oversee the financial propriety of clubs in this country. For so long as the rules are as lax as they are and the few rules that do exist are enforced so sporadically and haphazardly, the vulture capitalists and serial chancers will continue to flock, secure in the knowledge that they can walk away whenever they want, leaving somebody else to pick up the mess, if there’s anything to pick up at all.