The most recent teams in financial trouble are Rochdale and Torquay United, though for different reasons. Similar to those that came before them, including Southend United and Scunthorpe United most recently, leaving the Football League comes with its own set of difficulties in terms of budgeting.
Under chairwoman Michelle Harness, the Iron appear to be returning to a stable level off the pitch, but a first-time return to the National League is not assured and could present more difficult circumstances the following season.
Even though the Shrimpers said before Christmas that they were 99% over the line, they are still waiting for their takeover to be finalised. Eight weeks later, the team is still in a state of uncertainty, with a consortium covering costs for a team they do not yet officially own. The council announced on Monday that there will be a minimum of four more weeks of waiting.
Rochdale have a very limited amount of time remaining. The club’s owner, Simon Gauge, declared last week that the organisation has to raise £2 million or risk going bankrupt by the end of March. Even though these discussions have been successful in obtaining the funding, the club’s share structure needs to be altered for the organisation to continue.
Nine million new shares, or 90% of the club’s holdings, will be made available to the new investors by the passage of a resolution at an Extraordinary General Meeting (EGM) scheduled for early March.
Even though the team is characterised as “asset rich but cash poor,” the contrast between non-league football and Football League football is stark. Clubs in the pyramid are essentially left to fend for themselves without a piece of a respectable TV deal or subsidies from the Premier League. Although many clubs have relegation clauses included to player contracts, this does not adequately shield them from hard times.
Following relegation from the EFL, parachute payments are granted for two years. The club has 24 months to turn things around, and very few are promoted back within that time.
Some believe that sustainably run, but financially unable to compete with bigger clubs, fan-owned clubs like Dale are the way to go. The inability to provide financial injections in the event that things get a little sticky is another issue.
Just two years ago, Torquay was one penalty kick away from making a comeback to the EFL. However, with current owner Clarke Osborne pulling financial support and likely to place the team in administration, the Gulls could find themselves playing regional football, three divisions below the Football League, come season’s start.
With the inevitable ten-point deduction for administration, the Gulls would only be just above the National League South relegation zone, with the play-offs at the other end of the spectrum quickly fading from sight.
Osborne claims he won’t be able to continue sponsoring the team in the future due to a change in his personal circumstances and a lack of assistance in locating a suitable location for a new ground. The Gulls, another team on the verge of disaster, have fallen down the National League South standings after a bright start to the season.
Compared to Rochdale, administration for Torquay will secure the short term future while a buyer is sought, Dale on the other hand do not have that time to spare.
Seeing so many non-league clubs starting to show signs of financial ruin is worrying for the future. Whilst some have been subject to mismanagement off the pitch, others are also living outside their means and problems are now beginning to emerge far too frequently.
2020 should have been a wake up call to football when fans weren’t allowed inside stadiums, income streams suffered while bills still had to be paid. That showed many were on a level of unsustainability, the many that don’t appear to have learnt lessons from four years ago.
These current two clubs could well be the tip of the iceberg, a raft of postponed matches over the last two months has hit a lot of clubs very hard and it remains to be seen how many can limp through the last months of the season but won’t make it through the summer.
The calls for the independent regulator get louder with each club that falls below the poverty line, somehow football has to change for the better and look after it’s own, no one else will look to do the same, today it might not be your club but there will be plenty looking over their shoulders.
