Chesterfield, so far
In English football, the divide between those who have it all and those who have very little can feel almost absurdly great. This week, the Premier League has confirmed a new television deal in China that is worth £564m. It can be difficult, in a sense, to believe that such a contract can even inhabit the same universe as Chesterfield FC, where the chairman of the club, Dave Allen, resigned his position on dramatic circumstances on Monday, leaving it facing a possible cash flow crisis that could have serious ramifications for its future solvency. Yet only two divisions separate the opulence of the former from the cold, harsh reality of the latter.
Twenty years ago this season, Chesterfield came within an ace of achieving something that had never been managed before and hasn’t occurred since. The club’s run to the FA Cup semi-final during the 1996/97 season has become one of football’s great what if stories. Two-one up against Middlesbrough at Old Trafford, a shot bounced over the line off the underside of the crossbar that might have given them an unssailable leaqd and a place at Wembley in the final, but no goal was awarded, Middlesbrough dragged themselves back to a replay – Chesterfield scored in the last minute of extra-time to secure the draw – and then brushed their third tier opponents aside with room to spare in the replay. Two decades on, still no team from the bottom two divisions of the Football League has reached an FA Cup final.
The two decades since then have hardly been uneventful for the club, either. In 2001, financial irregularities on the part of then-chairman Darren Brown earned the club a nine point deduction. The financial fallout from his spell at the club would force it into administration and Brown, following a Serious Fraud Office investigation, would later be sentenced to four years in prison for charges including false accounting, furnishing false information and theft. The club was rescued by its supporters society. In 2010, it left its ramshackle Saltergate home for the sterilised, thoroughly modern B2Net Stadium (now the Proact Stadium), but last summer it found itself generating unwelcome headlines again, after inventing a winner of a raffle to join the team at a pre-season training camp in Hungary following the sale of only a handful of tickets.
Might this last story have been a hint at the behind the scenes culture of the club? It doesn’t take a huge amount of extrapolation to consider this a possibility, but, whereas the bogus raffle was in many respects treated as silly season filler in the press, this week’s news has had an altogether darker tone to it. Having won the League Two title in 2014, the team finished in eighth and eighteenth places in its last two seasons, but after a reasonable(ish) start to this season, they haven’t won a league match since beating Northampton Town in the middle of September and now sit at the bottom of the League One with just twelve points from their first seventeen matches.
Last Sunday, the cameras of Sky Sports visited the club for a local derby in the form of a visit from nearby promotion chasers Sheffield United, which ended in a four-one loss for the home side. This result, however, was hardly the catalyst for this week’s troubling headlines. Dave Allen, former chairman of Sheffield Wednesday, has been involved in the club since 2009, becoming its majority shareholder in 2012, but he resigned from the club’s board of directors on Monday after two fellow directors refused to indefinitely write off interest on loans that they had put into the club. This has plunged a club which has an immediate financial shortfall of £1.5m for this season into immediate crisis.
Such is the nature of modern football, though, with its eternal dependence on director loans in the lower reaches of the Football League, that Allen could scarcely be described as “walking away” from the club. It is estimated that it will cost between £9m and £10m to sever its ties with Allen completely and in full, and that starts to sound like a large amount of money for a club that is currently tailspinning towards the League’s basement division, although it has also been suggested that Allen may be open to negotiating a reduced amount. But, considering how out of the blue this all seems to have been, finding someone with deep enough pockets to get the club on an even keel might be a tall order, and that’s before we even consider the sort of work required to arrest the haemorrhaging of money from which the club seems to currently be suffering.
More troubling, however, is the small matter of the club’s immediate cash flow position. Allen is believed to have put £200,000 into the club last month to make up a shortfall for the players’ wages. What happens later this month, when the wages fall due again? Can the remaining directors cover that sort of shortfall? And what of other creditors? The club is believed to owe HMRC £60,000 and, whilst this may not sound like the largest amount of money in the world, HMRC are notoriously aggressive when it comes to football clubs, and £60,000 becomes a considerably greater amount of money than it might seem at first glance when directors are having to subsidise wages.
Allen certainly seems to have a keen sense of the theatrical. Monday’s departure came, not after a behind closed doors argument, but three minutes into a shareholders AGM, which was curtailed as the other directors and shareholders tried to take in this sudden resignation. Other directors were said to have no prior knowledge that his resignation was imminent, and it is this sudden need to scramble to save the club that is perhaps the most troubling aspect of the story of all. Where clubs’ financial problems are common knowledge for a long time before the money runs out, the opportunity is there for other investors to jockey for position and for contingency plans to be put in place to account for as much of immediate liabilities as possible.
At Chesterfield, though, everybody seems to have been caught off-guard and nobody seems to have a plan, and it is this immediacy that is most troubling of all. The Christmas period offers an opportunity for a spike in income and the January transfer window may allow the club to lighten its wage bill and bring in a little extra money, should anyone be interested in buying members of a clearly misfiring squad of players. It is the end of this month that is now looming large on the horizon, and with any failure to address financial responsibilities likely to nudge the club towards administration, time is now most definitely of the essence for the club.
Under such circumstances, Dave Allen would ultimately decide the fate of the club. As holder of the first charge on the mortgage over the stadium and its biggest single creditor, no CVA could be agreed without his approval. A best case scenario might see Allen accept a reduced amount from a new owner to pay him off and a much-needed injection of money into the club to see it through the remainder of the season. A worst case scenario might see the new stadium considered an asset to be sold by an administrator in order to secure the best deal possible for creditors. All stops in between are possible final outcomes for the club.
The sun rises in the east, and the Premier League’s new television deal will likely turn out to be another small step towards disappearing into the distance of a bright new tomorrow as the rest of English football below the gilded twenty clubs at the top continue to scrabble around for the scraps that fall from their table. Although things aren’t quite as bad as they were a few years ago, the story of Chesterfield’s week is a timely reminder that the majority of England’s football clubs are now sport’s equivalent of the precariat, dependent on whatever munificence they can find, living from pay-cheque to pay-cheque, and keeping their fingers crossed for a miracle that always feels as though it’s just around the corner. To that extent, perhaps the most surprising aspect of Chesterfield’s week is how comparatively rare these stories can feel. This, however, doesn’t mean that everything in the garden of English football is rosy.