The Scunthorpe Problem

by | Aug 17, 2021

“The Scunthorpe Problem” is familiar to anybody who works in IT. It’s the unintentional blocking of websites, e-mails, forum posts or search results by a spam filter or search engine because their text contains a string of letters that appear to have an obscene or otherwise unacceptable meaning, and it is a huge and unavoidable issue in a world which believes that it is necessary that we are protected from words.

The problem may well have a real world effect upon the town of Scunthorpe, because the inadvertent blocking of news stories from the town has been an issue for many years. There is, however, also a very real possibility that the football club might not have been too concerned about stories on their club not making it very far into the public domain for the last couple of years, because there hasn’t been much positive news emerging from there of late.

A decade ago, Scunthorpe United were a Championship club. They spent three out of four years at this level – this period included getting relegated and promoted straight back in 2009 – and the only season they played at this level without being relegated saw them finish in 20th place in the table. For a club that had in the past been little more than a catchphrase for unoriginal stand-up comedians, though, merely being there in the first place was an achievement. The season they finished in 20th place in the Championship, two of the clubs that finished below them were Crystal Palace and Sheffield Wednesday.

Peter Swann arrived at Glanford Park in 2013. Over the previous five years, it is said that he’d put £1.5m into National League North club Gainsborough Trinity, but this had been to little effect. They’d managed one play-off final appearance over the course of his time there, much of which had been spent in the lower reaches of the division.

He had plans, because they always seem to these days, to build a new stadium for the club, despite the fact that Scunthorpe had been playing at Glanford Park at the time for just 25 years. The projected cost of the project was £18 million and the new stadium was intended to have a capacity of 12,000. The new stadium was intended to integrate the stadium with businesses, including a hotel, an office, training and catering facilities in order to maximise revenue. It was further announced in July 2014 that the site of the new stadium was intended to form the focal point of the new ‘Lincolnshire Lakes’ development.

The project was planned to begin during the 2015/2016, but following issues regarding procurement of the land for the new stadium and issues with one of the developers, the construction start date was pushed back to the second half of 2017. When that time came around, though, the club instead announced that the plans for a new stadium had been dropped, and that the club would instead look to redevelop and extend Glanford Park.

In July 2019, planning permission was granted for the stadium redevelopment to begin, and in February 2020 February agreement was reached over a separate application to build 160 apartments on the site. In August last year, however, with the pandemic in full flow and the financial prospects of all EFL clubs starting to look even shakier than they had done a few months earlier, Swann confirmed that these plans had now also been placed on hold.

The problem was that all of this was going on against background of decay within the club itself. It’s only been five years since Scunthorpe United were knocking on the door of a place in the Championship again, finishing in third place in League One, just four points shy of Bolton Wanderers – a club who, as things turned out, were building a castle upon sand – before getting beaten by Millwall in the play-off semi-finals, after having drawn the first leg away from home. The following year, they finished fifth but came up short in the semi-finals again, this time against Rotherham United.

Since then, though, disaster. Scunthorpe finished in 23rd place in League One in 2019 and were relegated. The following year, when the League Two season was curtailed early, they were in 20th place in the table. Last season, with no fans present, they finished in 22nd place in League Two, just above the relegation zone. Even more concerning than this, though, was the state of the company accounts by this time. These accounts showed that the club had lost almost £1m in the year to July 2020 (PDF) and £3.6m in each of the two years before that. The accounts for the year to July 2019 and July 2020 (PDF) stated that, “The financial statements have been drawn up on a going concern basis which assume the continuing financial support of the parent company, Coolslik Property & Investment Limited.”

The club’s total debt by this point was £11.5m, a worryingly high figure for a club that is now only just been sitting above the relegation places into non-league football. Swann, however, had a plan, and in April this year came the sting in the tail. It was revealed that the club’s Glanford Park ground and other assets had been transferred into the name of Coolslik, a company owned by Swann, with £11m owed to the company being written off in the process. In other words, this transfer of assets had repaid loans effectively that were put into the club on his watch by his company, and this company has now claimed the club’s ground and everything else it has as repayment. It’s an unusual interpretation of “continuing financial support”.

Swann has of course, already vociferously defended the transfer, claiming that it will protect the club for a period of “999 years”. Fans, however, seem less than impressed and less than convinced by his attempts at self-justification. The team completely flat-lined in the last third of last season, winning just one of their last fifteen matches, finishing just three points above the relegated Southend United. This season, meanwhile hasn’t seen that much of an improvement, with a 3-1 home defeat against a Swindon Town team who’d only just met each other on the opening day and a goalless draw at Rochdale, another club with a degree of turmoil going on, last weekend. They were also knocked out of the League Cup at the first attempt, with a 1-0 defeat at Barrow.

There has been an air of lethargy about this entire start to the season. The crowd for the Swindon Town match was reported as 3,602, but many hundreds of these were travelling Swindon supporters, all of which indicates that crowds are likely to plummet this season unless the team’s decline on the pitch can be arrested. This moderately low attendance came on a weekend when crowds were flocking back to matches.

In League Two, Tranmere Rovers hosted more than 7,700 for their match against Walsall, while both Carlisle United and Mansfield Town surpassed 6,000 against Colchester United and Bristol Rovers, respectively. In 2019, Scunthorpe’s average home attendance was 4,227. After three successive relegation battles, it feels as though fans might be starting to give up, and if this is the best the club can muster on the opening weekend of this of all seasons, the likelihood of the numbers looking substantially grimmer by the middle of winter seems high.

There have also been complaints about the condition of the ground, of tatty flags flying above it, and of dust, cobwebs and worse on people’s seats when they returned to them after a year and a half away. There may be a conversation to be held over whether the club or Coolslik have the ultimate responsibility for this, but since are both in the control of the same man the answer seems pretty academic anyway.

Ultimately, fans who had locked out for a year and a half and who, considering the club’s form of the last three consecutive seasons, were doing them something of a favour just by having returned, had to bear the brunt of yet more evidence of what has been starting to feel like an inexorable slide. Was a lick of paint out of the club’s control or beyond its finances? Was there nobody who could have gone around the ground before the Swindon match and given it a spring clean before letting paying customers in?

So yes, Scunthorpe has a problem, and the problem is the condition of its football club. After having pumped the club with a debt that he must surely have known it was never going to be able to repay (Where was a club the size of Scunthorpe ever going to find £11m? Down the back of the sofa?), this action has now effectively pushed the blame for the club’s considerable indebtedness onto the club itself by claiming the ground and their other assets in return. And as if that wasn’t bad enough, whether through his company or his ownership of the football club, the ground can’t even now be apparently kept in a presentable condition.

The clear and obvious danger to Scunthorpe United at present is the question of what happens should the club find itself falling into non-league football for the first time since 1950. Football League status has been kind to Scunthorpe United. It’s conferred a level of recognition onto the town which might never have been realised had they not achieved it in the first place. Leaving again, however, would hit the club severely in terms of lost revenues, while the club will be a substantially less attractive proposition to future investors without any significant assets of its own.

There may well be two worse EFL clubs than Scunthorpe United on the pitch this season, but as we’ve seen countless times before on these pages, the problems often don’t come when a club is bumping along near the bottom of League Two. They come after that trapdoor finally swings open and the game’s attention has moved on. Swann claimed in April that this transfer of asset was “just a protection thing” and that “Assets are worth nothing if you don’t do something with them, and that’s what we intend to do”. Well, he certainly did something with them, but Scunthorpe fans surverying the wreckage of the last few years of his ownership could well be forgiven for asking who was being protected from what, here.