Chester City in Administration: The Stephen Vaughan Story

Last week, Chester City entered administration. It was the predictable end to a season of misery that saw the club finish second-bottom of the Football League, saved from the wooden spoon only by Luton Town’s catastrophic thirty-point deduction. With the playing staff reportedly in single figures and a PFA embargo preventing the signing of experienced replacements, the drop into the Blue Square Premier was already a grim prospect. Now, administration raises a far more serious question: what future, if any, does the club have?

For supporters of Barrow AFC, the situation at the Deva Stadium will provoke a weary sense of recognition. They might well be thinking, “we told you so”. The common denominator is Stephen Vaughan, the Merseyside boxing promoter whose tenure at any football club seems to leave a trail of financial chaos and unanswered questions about ownership and governance.

A History at Holker Street

Vaughan’s involvement at Barrow in the mid-1990s started brightly, culminating in promotion to the Football Conference in 1998. But success was short-lived. He resigned as chairman following an HMRC investigation into money laundering and his connections to Liverpool gangster Curtis Warren. Although he was cleared of involvement and reinstated himself, the club’s finances were already in a perilous state. He resigned again in November 1998, withdrawing his financial support but crucially holding onto his shares.

By January 1999, Barrow were liquidated. The new club, Barrow AFC (1999), was demoted back to the Unibond League, but the true damage was yet to be revealed. Vaughan had transferred the ownership of the club’s Holker Street ground to his own company, Vaughan Promotions, supposedly as repayment for his investment. The liquidator, Jim Duckworth, suspected foul play and began legal action. It took until 2002 for the court to agree and return the stadium to the liquidators, who sold it back to the club’s new directors for £265,000. For Barrow, it was a long and painful saga that nearly saw them cease to exist.

The FA's Fit and Proper Test

Vaughan arrived at Chester City in 2001, and controversy followed him almost immediately. When Chester were drawn against Barrow in the FA Cup Fourth Qualifying Round, the Football Association threatened to expel both clubs due to Vaughan’s conflicting interests as Chester’s owner and a Barrow shareholder. His solution was a transparent workaround: he sold his Barrow shares for a nominal sum of £1 to a painter and decorator named Bobby Brown just days before the match. After Barrow’s 1-0 victory, he bought them back, later selling them on to the new Barrow directors for £29,500. The FA’s limp handling of the affair was widely criticised and raised serious doubts about the effectiveness of its rules on club ownership, doubts which have lingered throughout Vaughan’s time at Chester.

On the pitch, there was a period of success. The club won promotion back to the Football League in 2004 and Vaughan oversaw improvements to the facilities. Yet trouble was never far away. In February 2007, he was charged by the FA with violent conduct after an incident in the players' tunnel. Later that year, the club held a minute’s silence for a man named Colin Smith, described as a “major benefactor”. It later emerged that Smith was, in fact, the right-hand man of Curtis Warren, murdered in a gangland shooting in Liverpool. Vaughan resigned as chairman shortly after the revelation but remained the club’s owner and majority shareholder. He was later charged with, and cleared of, fraud in relation to car finance in January 2008.

A Family Affair

As Chester’s fortunes declined this season, a sale was announced in March 2009 to a Liverpool-based property developer, Gary Metcalf. Yet the deal was not what it seemed. Instead of Metcalf taking control, club ownership passed from Stephen Vaughan Senior to his son, Stephen Vaughan Junior. The younger Vaughan, a 24-year-old who played 58 times for the club, is an unlikely figure to possess the means to run a professional football club, despite a youth career that included 70 appearances for Liverpool’s reserves. It appears to be a move designed to shield Vaughan Senior from receiving an administration marker against his name. Metcalf, whose son is a Liverpool-based boxer, is reportedly still interested, but the deal remains stalled.

This complex arrangement leaves the administrators with a difficult task. While supporters might hope to lobby for a community takeover, the reality is that Vaughan Senior claims the club owes him between two and four million pounds. If he is the largest single creditor, he holds all the cards. He could simply use the administration process to wipe the club’s debts and regain control of a cleaner, albeit damaged, asset.

Chester’s best hope may lie with the football authorities. The Football Conference, where the club is destined to play next season, has a reputation for being far tougher on financial insolvency than the league it feeds. It has the power to relegate clubs further down the pyramid for financial irregularities, as it did with Boston United. Vaughan’s history and his associations are unlikely to win him any friends among the game’s governors.

At best, Chester City will begin next season in a new division with a ten-point deduction. But with Stephen Vaughan still pulling the strings, things could yet get much, much worse.