Football Fortunes

After a summer of turmoil, Leeds United are appearing in a live televised game for the first time this season.






OK, so it's the Johnstone's Paint Trophy, the butt of all professional football jokes since it's inception in 1983, but they face Darlington tonight on the road to Wembley. It was almost inevitable that the match presenter opened the programme with "Seven years ago, Leeds were in the Champions League", but playing in the football league trophy is hardly the worst thing that could have happened to the club lately.

After being all-but relegated last season, the club exploited a Football League loophole and entered administration due to the long-term debts the club accrued in an ill-fated drive for the Champions League, with unsecured debts totaling £100m at one point before a succession of chairman chipped away at the debt.

Football League rules meant that Leeds incurred a 10-point penalty for their financial situation but, as they were effectively relegated anyway, the club faced the wrath of fellow Football League members.

As it emerged, it was all one big debt avoidance scheme by chairman Ken Bates, a man who himself resides in the tax-haven that is Monte Carlo.

Creditors of the club were vast, ranging from a local mobile DJ, a balloon supplier, St Gemma's Hospice and the St John's Ambulance but it was four main parties that were of major interest in this remarkable saga.

Whilst their was a number of creditors, the bulk of the debt was owed to four parties. Astor Holdings, Krato Trust, Forward Sports Fund and HMRC - the tax man to you and me. But here's the twist: Nobody had ever heard of the former three firms, they were based at various parts of the globe, including the British Virgin Islands, where businesses can set themselves up almost anonymously. The link was that Bates was attached or associated with the three firms all along. He was in a win-win situation. 75% of a creditors vote was needed for a new ownership of the club, yet Bates himself was attached to 45% of the creditors.

Bates promptly made an offer to creditors - you would get 1p back for every £1 you were owed. That meant that a local hospice, who were owed more than £800, would get little more that £8. However, in line with Football League regulations, all 'football creditors' had to be paid. That meant that former players, owed hundreds of thousands of pounds, would receive every penny.

The offer didn't go down too well with the tax-man, who challenged the resulting CVA.

I could go on here but I'll bore you. Long story short, the CVA was scrapped, against Football League rules, and after much uncertainty over whether the club would be allowed to compete, they were eventually, at the eleventh hour, granted entry to League One - with a 15-point deduction and no FA membership.

There was one other Yorkshire side though who weren't so lucky.

Scarborough FC are another football club who had been teetering on the brink of collapse for a number of years.

As the debts mounted, the solution seemed to be to leave their home at Seamer Road and move to a new, purpose built ground on the outskirts of the city. There nothing wrong with the McCain Stadium, I went their myself whilst following Farsley Celtic last season and as a Conference North ground, there few, if any that were better. But the site was prime land for property developers. Flats and apartments were starting to surround the ground and the "Seadogs" wanted to cash-in on the housing boom.

But local politics got in the way. A covenant existed on the site that restricted its use only to sporting activities. There was no way that the site could be sold to a property developer without the covenant being lifted. Despite the club's best efforts to convince the authorities that this plan would save the club, Scarborough Borough Council refused to budge.

Inevitably, the club was wound up. A new club has formed, Scarborough Athletic, in the Northern Counties East League and the club, an offshoot from a side that was facing Chelsea in the FA Cup in 2004, will face Kirkbymoorside this coming Saturday as part of a league campaign that will take in Rainworth Miners Welfare and the Leeds Metropolitan University team.

There are probably intricacies and details that I'm probably not aware of in the case of Scarborough FC, but from the outset, it seems a shame that a local authority was so short-sighted when it came to the state of the club. After insisting that the site at Seamer Road could only be used for sport, they now have a site with no sports team which will, in all likelihood, be sold off to a property developer.

I also type this just hours after Widnes Vikings RLFC themselves entered administration.

In the chase for promotion, they banked heavily on a result which, on Sunday, never came. Today the club are counting the cost of that ambition and, although it would seem unlikely, the sport could lose one of it's great names.

The rugby league authorities are introducing a franchising system from 2009, which would eliminate automatic promotion and relegation and force clubs to build a long-term plan and prove that they are capable of competing in the elite division - both on and off the field. It can't come soon enough.