Is The Bell Tolling For Southend United?
If ever there was an appropriate time for a club to drop to the very bottom of the pile, then this was probably it. Southend United are back in court again on Wednesday, and this time they might not survive. In the middle of September, the club was given 42 days to pay £493,991 owed to HMRC for unpaid tax, PAYE and NI, and this weekend, with just three days left before their next date at the High Court, owner Ron Martin has admitted that thie time around, the club may not be able to satisfy its creditor.
In a Q&A session with supporters, Martin was asked if he had the funds in an account right now and could guarantee that HMRC would be repaid so the case would be dismissed. His reply was curt, answering, “If the club had the funds it would discharge the debt to HMRC. The club does not have an overdraft”, and added that, “We are working hard to discharge the tax bill, but nobody underestimates the challenges in football as a result of Covid.” All of this is a stark contrast with Martin’s bullishness on the matter a month ago, when he told BBC Essex that:
We will discharge the debt at the time the next hearing comes around. Certainly the club won’t be able to discharge the debt so I will support it through this. HMRC have not been at all aggressive. We agreed to a six-week adjournment. I have a responsibility to all the staff and also the community to make sure this succeeds. We are light years away from where Macclesfield were.
So what’s changed in the last month? Was Martin expecting to get half a million pounds – at least – from the Premier League or the government to tide it over? He says himself that, “I have a responsibility to all the staff and also the community” to get this matter resolved before Wednesday morning, so what is the issue on the 25th October that wasn’t an issue on the 25th September? And as for his comment that Southend are “light years” from the position in which Macclesfield Town found themselves, well, Southend United currently find themselves 48 hours from a court hearing for an amount of money that the club cannot currently pay. Rather than being “light years” from Macclesfield’s position, Southend are precisely two days from finding themselves in the eact same position as them.
It may well be that the current pandemic provides the gentle nudge required to finally push Southend United over the brink and into oblivion, but let us be under no illusions whatsoever that this is in any way the cause of the club’s current ills, either. Southend United’s financial position has ben parlous for the last few years now, and it borders on disingenuous for Martin to bring it up in relation to the current petition. It’s well-known that Southend United have one of the worst records in English football for racking up dates at the High Court over unpaid tax bills.
Meanwhile, the saga of Fossetts Farm, the 21,000 cure for all the club’s ills that Martin has been pushing for years without actually having come to anything, continued to rumble on in the background. On 2nd April, the club “struck a deal” with Southend Council and “social housing provider” Citizen Housing to manage housing developments at Fossetts Farm and their current Roots Hall home. This would form – and presumably help finance – part of the overall stadium plan.
The last set of plans, however, scaled back from what had been seen before. The farm would now accommodate 14,000, only 1,600 more than Roots Hall. The Southend Echo local newspaper’s Steve Shaw wrote of “an ambition” to reach 21,000 “eventually” but added that “plans for shops, a cinema and restaurants” were “all being dropped and replaced with housing… 502 at Roots Hall” and “about 800 new properties… at Fossetts Farm.”
Not that it seems any more likely that anything will ever come of Fossetts Farm, of course. The club’s financial position was one of the highest in English professional football prior to the start of the pandemic. With Macclesfield Town having already bitten the dust, Southend United moved to become the undisputed kings of financial basketcasery. When last season was truncated, they were only kept off bottom place by a Bolton Wanderers team that had suffered a twelve point deduction themselves.
This season didn’t start much better, either. Eight games in, Southend have yet to record their first league win of the season, and they’ve lost six of the eight matches that they have played. In addition to this, they lost their only pre-season friendly to Millwall, were knocked out of the League Cup at the first hurdle by Gillingham, and have lost both of the matches they’ve played in the EFL Trophy. Their last win came in their last match prior to the lockdown, a 3-1 win against Bristol Rovers, a result which ended a run of having lost their previous six successive matches. Put another way, wins have been thin on ground of late, for Southend United. They’ve won just six matches in all competitions since the start of the 2019/20 season.
The team’s manager since August arrived at the club with a record of which he could be proud. Mark Molesley had previously been involved at coaching with Bournemouth before becoming the Weymouth manager in 2017, while the club was still in the Premier Division of the Southern League. Two successive promotions – the opposite of two successive relegations that took the club in the opposite direction down exactly a year earlier – have taken the club back into the National League, and it was therefore a little surprising to see him jump ship for Roots Hall in the middle of August, with there now only being one division between the clubs and Southend seeming to be approaching terminal velocity in their downward spiral.
So how, exactly, do Southend United pull through this week’s court hearing? They can pay the full amount that they owe HMRC, of course, but that seems vanishingly unlikely. Southend United had issues fulfilling their most basic of financial obligations even before they lost the majority of their income thanks to the current pandemic, after all. So that leaves two options. They could put the club into administration before the next hearing on Wednesday. This would at least nullify the current threat posed by the petition that is currently in court, but such a decision would also push the club into a fresh period of uncertainty.
How many eager buyers are there going to be, at this particular time, for a football club in the condition in which Southend United currently find themselves? Prospective buyers would have to take something of a shot in the dark. The company’s accounts for the year to July 2018 are the last that are available on Companies House (this year’s are now three months overdue), and they make for sorry reading (PDF). At a time when we know for a fact that just about all football clubs below the Premier League are desperate for money, what would be the appeal to outsiders to come in and rescue this particular club? Martin has lent Southend United almost £19m since he took ownership of the club, but as a property developer his business may well also be struggling at the moment. So… what’s the plan, here?
This morning Martin put out a statement which, somewhat unhelpfully, doesn’t really clear a great deal up. Somwhat surprisingly, it made no reference whatsoever to Southend’s forthcoming return to the High Court, the matter which will likely at the forefront of the most of the club’s supporters today. Indeed, the nearest he gets to mentioning it is in his apparent irritation at the lack of bailout money having come through despite EFL clubs having started the season behind closed doors. Perhaps Ron Martin needs a reminder that, while the precarious state of Southend United Football Club may have been exacerbated by Covid-19, it was not caused by it. This club has been on the critical list for a long time. It’s a lesson that, unless something changes quite drastically over the next 48 hours, he may well learn the hard way, on Wednesday morning.