National League beckons for Southend and Grimsby… but there’s a way back

SOUTHEND UNITED have rehired Phil Brown as their manager with six games to go this season, but whether he fancies a stint in the National League remains to be seen. Southend would appear to have one foot in the non-league structure. They have hordes of unhappy fans, an unpopular target of a chairman and they are unloved by the tax man. In these troubled times, a club with so many problems could find itself victims of a train wreck.

There has been talk of a new stadium for some years, and in November 2020, the club announced a new home would be built at Fossetts Farm with the Roots Hall site developed for housing. They’re still waiting for things to become clearer on when the project will move forward. The last thing they will want is to open up a new era with the club residing outside the Football League. Southend is a town with almost 200,000 people, it should be able to accommodate football at a reasonably high level.

Grimsby Town, another coastal club, are also in the mire and although they currently have a game in hand on Southend, they are still bottom of League Two. They are in the process of being taken over by a consortium, although some doubt was cast on the deal as one of the key members recently resigned. Grimsby have been in the National League before, but they are now approaching the end of their fifth season back in the Football League after winning promotion in 2016.

The other main relegation candidates are Colchester United, Barrow and Walsall. Colchester have hit a bad run at the wrong time, but there are increasing rumours they are about to go into administration, which may affect the relegation battle. The club have denied they are in trouble.

Relegation to the National League does not have to be a death knell, indeed it can act as a springboard for revival and a chance to reset. Clubs who have not been accustomed to winning can suddenly acquire a new habit, crowds can regain their enthusiasm and off the pitch, a club can regroup. However, if the club in question is on a downward spiral and has deep-rooted problems, it can be the start of an extended lost weekend. 

There have been a number of clubs who failed to recover from the psychological blow of losing Football League status: Boston United, Halifax Town, Darlington, Chester, Hereford United, Macclesfield and York City. Some have gone to the wall, reforming as phoenix clubs, Macclesfield Town being the latest victim. 

It certainly can take time to acclimatise, both on and off the field of play. Since 2000, only four clubs have won promotion at the first attempt: Shrewsbury Town (2004), Carlisle United (2005), Bristol Rovers (2015) and Cheltenham (2016).

There’s been a lot of churn between the EFL and National League over the past 20 years. Of the current League Two constitution, 17 have seen step one of the non-league pyramid and 11 of the National League have tasted life in the Football League in some shape or form. And of the 92 Premier/EFL clubs, 29 have modern non-league experience. 

On average, the teams that have won promotion after relegation do it between three to four years. But some find it hard to get back to where they once belonged. A classic case is Wrexham, who have now, surpriisngly, been in the National League for 13 years. 

To some, Wrexham are simply too big to be playing outside the EFL. In 2018-19, their average gate at the Racecourse ground was 5,077 – that’s higher than when they were last in the EFL. But go back 40 years and they were drawing over 10,000 – which shows you the potential of the club.

Wrexham were taken over by Hollywood actors Ryan Reynolds and Rob McElhenney earlier this year and the duo have invested £ 2 million into the club under the terms of the deal. They tried to incentivise the players by promising bonuses if the team wins promotion in 2020-21, but that may be beyond them now. Needless to say, Wrexham may be installed as favourites for 2021-22.

Who will go up this season? Sutton United are currently top, a club that has a rich non-league history, but would be unlikely EFL members. However, it is often a club on a roll that can emerge as surprise winners. Hartlepool, Stockport, Notts County, Chesterfield, Halifax and Wrexham are all in with a shout at the top end. Sutton is the only town with no Football League heritage among the pack, but its population runs to 200,000. Close proximity to London clubs may be something of a disadvantage.

Sutton have an artificial pitch at their Gander Green Lane home, so if they do win promotion, they will have to take it up and replace it with a natural surface. The question is, can they sustain EFL football and stay solvent? If they win a place but refuse to take it, they will be penalised, but where will the logic be in ripping-up a facility that has clearly played its part in revitalising the club if Sutton United are relegated in season one? A difficult situation, especially in 2021.

Two promotion places (and relegation places) have shown there can be a two-way flow that works reasonably well. It may not be an enjoyable experience for those that fall through the trapdoor, but at least it should make clubs conservatively provision for failure, rather than assuming the status quo will never be challenged. Clubs like Luton Town, Leyton Orient and Cheltenham have all shown it can be done. As the fans of Southend, Grimsby and Colchester make their journeys for the final run-in, they may wish to take some consolation in knowing they can get back. The wheels may come loose, but it is important to ensure they don’t come off the wagon if and when relegation is confirmed. In the uncertain post-covid football environment, prudence and pragmatism will never be more important, as well as calm heads.

@GameofthePeople

Photo: Alamy

League Two: The looming crisis

THE coronavirus pandemic has highlighted many things in the football world: the ongoing imbalance across most of Europe’s major leagues; the vulnerable business models of some clubs; the extravagant wage-to-income ratios; and continued aggression in the transfer market.

While the top clubs have the means to recover from huge losses of income brought about by an absence of matchday income and associated commercial revenues, smaller clubs have far less protection in a crisis. Matchday revenues form a larger part of overall income for smaller clubs than for the elite clubs, therefore the effect of the pandemic can be comparable to falling off a cliff.

Many football industry professionals have predicted a collapse of lower league football with dozens of clubs having to overcome existential obstacles in the aftermath of the crisis. Bury and Macclesfield have both fallen over in the past year and it is nothing short of a miracle that others haven’t gone the same way. One can only assume that creditors have adopted a reasonable approach and banks have accepted the current crisis impacts us all.

But the pandemic should teach us a few things, not least that many football clubs live beyond their means and struggle to handle the unexpected. While a lot of people hope for life to return to normal, the post-crisis environment should also act as the catalyst to improve businesses, reshape financial models and also build-in risk management functions.

League Two is a very vulnerable division in the UK, although the Championship – with its track record of spending more than the clubs earn – may yet prove to be the English league’s most financially risky area. Many fourth tier members are just a bad season away from experiencing severe financial pressure.

Southend United have been making the wrong kind of headlines in recent months and have more red flags flying than their local beaches. Southend have been waiting for a new stadium to emerge for some years and although the plans are in place, the club is in a precarious position at the moment. Southend’s wage bill is high but the club has been in decline for a couple of years and was relegated in 2019-20.

Indeed, the biggest concern is the £ 493,000 owed to HMRC, a debt that cannot be ignored for too long. Southend have until the end of October to pay this sizeable amount and if they do not, a winding-up petition will surely come their way. Ron Martin, the club’s chairman, has said that Southend’s parent company will pay the HMRC. 

Southend started the 2020-21 season disastrously, losing 4-0 at home to Harrogate Town and are perched near the bottom of League Two. Ron Martin says they are light years away from Macclesfield in terms of their outlook, but people are worried about the future of the club.

Oldham Athletic were seemingly in danger of being evicted from their Boundary Park home earlier this year, but their new CEO, Karl Evans, believes they are no more worse off than any of their rivals in terms due to the pandemic. The Latics’ fans want owner Abdallah Lemsagam to sell-up and there have been interested parties who were interested in taking the club off his hands, but the threat of administration still hangs over them. Oldham have also been warned about late payment of wages by the EFL. 

Morecambe are the EFL’s smallest club and struggle to draw 2,500 people to their home games. The club voted in favour of salary caps and also hoped for a rethink of English football. Although they’re losing money, they also have the smallest wage bill in League Two. In order to ease their problems, Morecambe launched a crowdfunding campaign, which proved to be successful.

The crisis has hit Scunthorpe United hard as their wage bill has exceeded their income to the tune of 143% and they have more than £ 11 million of debt. The club deferred around 20% of players wages as the pandemic took hold of Britain.  At one stage, the club was losing £ 50,000 per week. 

Tranmere Rovers’ Chairman Mark Palios has been very vocal about his concerns and has envisaged a loss of between £ 400,000 and £ 500,000 for his club. Exeter City are anticipating a deficit of some £ 700,000 and Colchester United are bracing themselves for a £ 400,000 loss. Bolton Wanderers, now in League Two, expect income to drop by £ 1 million. 

Walsall’s chairman has commented in public that his club have done remarkably well during the pandemic. The Saddlers’ players volunteered for the club’s cost reduction programme.

It is difficult to find good news from among the League Two membership, although Port Vale admitted their club was strong because of the financial support it receives from Carol and Kevin Shanahan.

The combined revenues of League Two clubs amounted to £ 91 million in 2018-19, less than half of the League One total. When you consider that the top six clubs in the Premier League (Manchester United and City, Liverpool, Chelsea, Arsenal and Tottenham) generated almost £ 3 billion between them, it is clear there is enough money in the game to help every club in financial trouble.

While a fighting fund is a perfectly reasonable thing to suggest, if only to ensure the eco-system remains intact, it smacks of democracy, the very thing football is not about. The game is all about the survival of the fittest and meritocracy, with a little dose of schadenfreude thrown in for good measure. Although some fan groups champion a form of socialism, it doesn’t represent the ethos of most clubs.

The EFL and the clubs also have their future in their own hands. Carlisle United’s co-owner said that “The Armageddon scenario is pretty close” when describing the current situation among small clubs. But while financial directors wring their hands and squirm in their seats, the transfer market rolls on with the Premier League spending £ 1.45 billion in the recent window, far more than the other big European leagues. With so many of England’s clubs living a precarious existence, does this really feel right?

@GameofthePeople

Photo: PA