The National League Season Hits The Fan

by | Feb 21, 2021

So the schism begins to open. The news of National League clubs threatening legal action could end up just about anywhere, and it’s likely that things will get messier before they get cleaner again. It took less than 24 hours for cracks began to show. Two clubs – Gloucester City of the National League North and Dorking Wanderers of the National League South – announced that they would be seeking legal advice following the voiding of their league seasons, and they were joined by 16 other clubs in signing an open letter (PDF) to Mark Ives, the general manager of the National League.

What is immediately obvious from looking at the list of co-signors is that the vast majority are in the top half of the two divisions. No club’s existence on the list is more hypocritical than that of AFC Fylde. Their owner, David Haythornthwaite. In April he voted to last season early, and then voted for no promotion or relegation with his club in the National League’s relegation places. This time around, his club has been amongst the loudest in the claiming injustice of their losing the National League’s votes on whether to end this season early.

To recap: last Thursday, the National League took two votes over whether to end its season or keep playing. The first determined that clubs would be voting for what happened only in their own division. The second asked each of the three divisions whether they would continue or void. The National League voted to continue. The other two divisions voted to cancel. The vote was decisive, but it was showed the split that was opening up between those who wanted to keep playing and those who wanted to end their season now, following confirmation that the DCMS will only be releasing further funding to clubs through interest-bearing loans rather than grants.

This is, of course, a story that goes back several months. The first payment made to clubs at the end of September was a grant, and clubs have consistently claimed since then that they were led to believe that this would be the case at the end of December as well, and that they cannot afford loans that would financially hamstring them for years. It has even been argued that clubs would be breaking the League’s own rules by taking on such loans.

Exactly how this misunderstanding came about is an important question that needs to be answered. Could it have been as simple as someone failing to understand what had been agreed and reporting that on to clubs? The matter has been slightly complicated now by the understanding that the DCMS rejected a Freedom of Information Act request from BBC Radio journalist Ollie Bayliss for documentation relating to the negotiations and what exactly was minuted. The DCMS response – or lack thereof – has, of course, set yet another cat amongst the pigeons.

Their justification for non-compliance was less than convincing. Several clubs owners have already come forward and stated that they would not have started the season, had they know that funding from the end of December on would be in the form of loans rather than grants. Some have muttered about how convenient it could be for the National League to get their season underway to somehow give the impression that the deal reached was something that it wasn’t. Until somebody stands up and tells this story completely honestly, the rumour mill will continue to turn. In the meantime, though, let’s have a look at the points raised by this letter:

• Our feedback and experiences week to week leave us in little doubt that the majority of our communities and supporter base are under extreme strain within the current lockdown conditions. Looking forward to better times and more normality is a large part of keeping people positive. We believe that a Null and Void scenario would negatively impact the mental health of our supporters and communities.

The last few months have been difficult for everybody, and I say that as somebody who has fought with depression for a quarter of a century. I can, however, see no evidence from Gloucester City or Dorking Wanderers of having been involved in mental health community initiatives previously since the start of the pandemic, though I also note that AFC Fylde listed an advertisement for a Loneliness Officer on the same day that last week’s vote was taken.

• Our supporters, season ticket holders and commercial partners have demonstrated a huge amount of goodwill and faith by retaining their season tickets and accepting that their interaction with their club will be remotely and digitally rather than what they signed up for and attending matches. A Null and Void season would require either substantial refunds or carrying over the commercial and ticketing revenue into next season. This would have a huge impact on future commercial revenues.

It would ultimately be down to the supporters and commercial partners of all clubs to decide whether they wanted to be refunded on season tickets from the start of this season. But how would curtailing this season be much different to playing on behind closed doors? At present, there has been no specific suggestion that grounds will reopen to the public, and when they do it will be highly unlikely to be for anything but highly restricted numbers of people. Should the clubs concerned somehow be able to get this season restarted, given these comments it seems reasonable to assume that these clubs will be refunding all supporters and commercial partners in full. How do the clubs leading these actions propose that those on the brink of insolvency do the same?

• With the outcome of the vote being Null and Void in Step 2, the ability to have promotion and relegation between Steps 1 and 2 is lost. Promotion and Relegation within the National League system is a fundamental value which the league has worked hard for over the years and which was the motivating driver in reaching a sporting conclusion to last season. We feel it important for our relationship with the EFL that both promotion and relegation be retained at Step 1 and Step 2.

In that case, why did AFC Fylde vote to end the season with no promotion or relegation last season? Beyond the fact that they were near the bottom of a league table last season and are near the top of one this time around, what has changed? It has been argued that the most significant way in which promotion and relegation between the EFL and the National League would be affected would be if not all National League clubs can complete their seasons, and this definitely seems to be the case.

• Last year, although the clubs voted to curtail the season, the playoffs and automatic promotion places were sanctioned, and we believe a similar approach should be adopted this season to maintain the integrity of the overall competition.

If some of the clubs in your division have had to furlough their players because they cannot afford to pay them and are already failing to fulfil fixtures (as happened in the National League yesterday), there is already no true “integrity” in your competition. In addition to this, last season’s promotion and relegation was agreed with more than there-quarters of the season having been played. This is not the case this time around (the National League is less than half completed, and the two divisions below it are more like a third completed), and forcing clubs to play against their will, with the only alternative being to take out loans which they have already said they cannot afford, is morally questionable, to say the least.

• All clubs have accepted financial support from the National Lottery for the months of October, November and December and also FA grant funding in order to prepare and proceed with league matches behind closed doors. Those conditions remain and we feel we have an obligation to proceed and complete the season having already accepted that funding.

As mentioned above, several clubs have already stated that they would not have started the season at all had they known that only the first round of payments would be grants, with the rest having to be taken in loans. How this came about needs to be investigated as a matter of the utmost urgency.

• We have all invested considerable sums, by entering into contracts and taking on liabilities on the basis the season would progress to a full conclusion whether behind closed doors or not. How are we expected to now reconcile this investment and commitment? Numerous clubs are entering dialogue with Sport England regarding grant and loan funding to continue operating and are exploring every option to fulfil this season.

It’s difficult to know what to say to clubs who are either sufficiently financially insulated – through having the means to take out loans or owners with deep enough pockets to fund their clubs – to be able to continue under the current conditions. The grant funding that has been offered this time around is a matter of last resort, and we’ve already covered the subject of the loans above. There are clubs who cannot take loans, and who cannot carry on this season without grants. That’s not a matter of opinion, it’s a matter of fact.

As well as Dorking Wanderers, Gloucester City and AFC Fylde, the following clubs have also signed the letter: Boston United,  Havant & Waterlooville, Chelmsford City, Hemel Hempstead Town, Chorley, Hungerford Town,  Concord Rangers, Kidderminster Harriers, Dartford, Oxford City, St Albans City, Eastbourne Borough, Welling United, Ebbsfleet United and  York City.

There has been talk of legal action over the last couple of days, so it may be instructive to look at what happened at the end of last season. When the Northern Premier League season was curtailed, league leaders South Shields, who’d spent heavily and were comfortably clear at the top of the table, forced the matter to an arbitral panel chaired by Lord Dyson. South Shields’ legal case rested on three points:

  1. First, the club argued that the decision was ultra vires Rule B.2 of The FA’s Rules of the Association, which requires the ongoing existence of “relegation and promotion links” in the NLS and the amendment of which is a shareholder-reserved matter.
  2. Second, the club argued that The FA had failed to engage in relevant consultation with the various clubs in each affected Step of the NLS prior to the decision.
  3. Third, South Shields alleged that a change to remove promotion for the 2019/20 season unlawfully interfered with accrued rights. By that ground, the club contended that The FA had a contractual obligation to promote and relegate clubs at the end of each season. That was said to be an essential term upon which clubs participated in the relevant competition, such that the rules and regulations could not be amended once the season had started and/or, inter alia, a relevant legitimate expectation to similar effect.

The arbitral panel, though, dismissed their claim on each point. It held that:

  • The FA’s decision was not ultra vires Rule B.2 of the FA’s Rules of the Association in that the mandated promotion links did not necessarily require there to be promotion and relegation at the end of each season and did not therefore preclude the voiding of the whole or part of a season.
  • The allegation of breach of the (admitted) duty of relevant consultation was not made out in all the circumstances.
  • South Shields did not have any accrued or vested right to promotion. The presumption against retrospectivity did not require an interpretation of The FA’s Rules that only permitted the amendment of its rules and regulations before the commencement of any playing season. Nor did South Shields have a legitimate expectation that the rules and regulations would not be changed during a playing season. The FA had never given a clear and unequivocal representation to that effect, and in any event was entitled to take the decision it did.

This failed action cost the club £200,000 in legal costs, which led to fans setting up a Go Fund Me to try to raise half of these costs. It fell some distance short of its target. Commenting further on the likelihood of any legal claim brought against the National League is difficult without knowing the specifics of said claim, though. All we can say with much of a degree of certainty is that the bar for having a claim against a League is likely to be very high. If the National League has broken its own rules over the last few months, then the clubs may have a chance of success, though what ‘success’ would look like in this context is difficult to define.

South Shields failed in their claim, even though they were relatively close to the end of the season (they’d played 33 out of 42 league games at the time of last season’s abandonment, and were twelve points clear at the top of the table), but that was their claim. Any legal action brought now would likely be based upon different legal grounds, but they would have to go through the arbitration process first.

Could these clubs make a claim for “restraint of trade”, though? Well, restraint of trade may be defined as ‘a restriction imposed on free trade, or a condition limiting an individual’s liberty of traders to buy and sell freely’. Restraint of trade clauses are contractual clauses imposed on an individual of business. For instance, one may be imposed by an employer to restrict or prevent an employee moving to a competitor after they leave, or through restricting their activities when they do. They’re also commonly found in sale/purchase agreements to limit the activities of a seller to act in competition with the business sold after completion. For instance, the buyer may wish to prevent the seller entering the same type of business in the same geographical location for a certain period of time.

There are, however, exemptions to this. For example, the court may consider whether such a restraint is reasonable and in the public interest, or whether the party subject to the clause has been sufficiently compensated for that restraint. It may also look at industry practice and other similar contracts within the industry. How this might apply in terms of this season in the National League is almost infinitely debatable. Again, though, it would depend on the specifics of any claim brought. The Gloucester City co-chairman Alex Petherham claimed last week to have “formally started legal action” against the outcome of last week’s vote. What are the specifics of this claim?

There might be a claim to be made that the League’s voting structure is not truly “democratic” in the sense of each member club having the same voting rights (NL clubs have a vote each, while NLN and NLS clubs have eight votes per division), but this is not necessarily uncommon within football. Until the creation of the Premier League, the Football League divided its clubs into “full” and “associate” members, with different voting rights for clubs in its top two divisions and clubs in its bottom two divisions. The League would likely argue that it’s their house and their rules, and that all clubs enter into membership in full knowledge of all of its rules and regulation. Were formal complaints brought over the voting structure before the vote took place? Because if they weren’t this all starts to look a bit like seeking to overturn the result of the vote simply because it didn’t go the way those clubs wanted.

Meanwhile, any hopes that last week’s vote would at least result in the National League playing on as per normal were dashed almost immediately. Dover Athletic and King’s Lynn Town were amongst the seven clubs in the National League to vote to end the season, and they were due to play yesterday afternoon. With Dover having furloughed their players and King’s Lynn having confirmed that they had the wherewithal to be able to play two more matches and no more, though, the match was not played.

Dover have already been charged by the National League with failing to fulfil two fixtures, and chairman Jim Parmenter, who’d already resigned his position on the League’s board, saying, “We are clearly very disappointed that the National League seem to be sticking to their guns and applying rules of the competition with no proper awareness or consideration for the exceptional circumstances we find ourselves in.” With the fines for this ranging from £2,500 to £10,000, how on earth are clubs who are already teetering on the brink of insolvency ever supposed to pay such fines?

And the result of all of this is an absolute mess. At this point in time, there are definitely matters relating to the administration of the National League that require urgent investigation. At the risk of sounding like a stuck record… what was the distribution model used for the money paid to clubs after the end of September? Why hasn’t the Bernstein investigation into this been published? And how did we get into a position in which clubs believed that further funding would be in the form of grants rather than loans when that plainly wasn’t the case? This season has been one of failure after failure by the board of the National League, and clubs fighting amongst themselves is only obscuring these extremely important questions.

To be clear, all of the above is not intended as an attack on the clubs who do wish to play on and complete their seasons. It is obviously understandable that different clubs have different priorities, and these positions are all fair and reasonable. The ultimate issue has been months of mismanagement by the board of the National League, and that is what really needs to be fixed, if non-league football is to prosper in whatever the post-pandemic “new normal” turns out to look like. At the moment, though, the three divisions of the National League are tearing themselves apart, and everybody concerned – players, staff, and fans themselves – will ultimately suffer if more common ground between clubs cannot be found. The stakes are as high as they could be for non-league football, but in a leadership vacuum the possibility remains that all of this could just disintegrate.