Bottom of the National League with a winding-up petition having been served and a takeover moving forward glacially slowly, Scunthorpe United are in a mess.
Considering what has been going on around the club, the result was a pleasant surprise. The first weekend of the New Year brought a 3-0 win for Scunthorpe United against Maidenhead United, with Caolan Lavery scoring their first hat-trick since 2016. It wasn’t enough to lift them off the bottom of the National League table but it did at least close the gap on those above them to just two points, and when you haven’t won in the league since the last weekend in October, every little helps.
But Scunthorpe supporters aren’t only fretting about the state of the team on the pitch. This week saw confirmation that the club has been served with a winding-up petition by HMRC. HMRC had been ruthless pursuers of outstanding tax and National Insurance in years gone by but seem to have been somewhat quieter of late, possibly pacified by a change in the law which gave them preferred creditor status in insolvency hearings for the first time since 2006. The amount on the petition is not known.
It should go without saying that this is very bad news for Scunthorpe. The club has been up for sale for some considerable time, but it was reported in September that owner Peter Swann was on the verge of agreeing terms to sell the club to a consortium of local businessmen. This sale moved on to due diligence – essentially a pre-sale appraisal of the company to ascertain its commercial position and ensure that there isn’t anything too unpleasant lurking in a corner of the accounts or anything like that – and to begin the process of the transfer of ownership. It was confirmed at the start of December that all concerned had reached terms.
This confirmation came at the same time as altogether more unsettling rumours from BBC Radio Humberside that players and staff had not been paid on time at the end of November. A month earlier, Chief Operating Officer Lee Turnbull had to dismiss rumours that the club had struggled to pay October’s wages, adding there was no ’cause for concern’, despite wages arriving later than usual into bank accounts at the end of the previous month. Shortly before Christmas, interim manager Michael Nelson confirmed that the club were building an “extensive portfolio” of players to sign for when they are allowed to make transfers after their embargo was lifted.
But we’re now into the second week in January, and there has been no update on this since December 21. And in the meantime another name has been thrown into the ring: Norman Smurthwaite, the former owner of Port Vale.
Smurthwaite’s time at Vale Park wasn’t especially happy. He owned Port Vale from 2012 to 2019, when he bought the club out of administration, and the latter stages of his time in charge were marked by protests against him by the club’s supporters. By the end of his time with Vale, even local newspaper the Stoke Sentinel had joined in the calls for him to go.
He missed the final game of his time in charge of the club, supporters parading a huge banner across the away end of Bury’s Gigg Lane depicting Smurthwaite with a dummy and rattle under the headline ‘Bye, bye, cry baby’ – get out of our club.’ His association with the club finally ended in April last year when the Shanahans, who bought the club from him a few weeks after the Sentinel’s headline in May 2019, made their final payment to him.
Certainly Peter Swann could be forgiven for having other things on his mind. Shortly before Christmas, it was reported that Swann is embroiled in legal action against Apollo Bookmakers with published court documents confirming a claim from Swann that he was encouraged to gamble beyond his means by Apollo, who received £3.8million from him during a three-year period between 2015 and 2018.
It has been estimated that Swann gambled £20m on various sports, although it should be added that none of this betting was on football, which would have been against FA rules. Swann also confirmed that the money spent during this time was his own, rather than being anything to do with the football club so that’s, well, something.
Relegation into the National League isn’t easy, and clubs expecting an easy ride in the ‘non-league’ game have found themselves facing up to a somewhat rude awakening before. Oldham Athletic, the other team relegated with Scunthorpe at the end of last season, have been under new ownership since the end of July, when Frank Rothwell bought the club from the much-hated Abdallah Lemsagam. Even with Lemsagam finally removed from the picture, Oldham are only one place above the relegation places themselves.
And to fall below this level only makes the task of getting back all the more difficult. Stockport County dropped into the National League North and it took them six years to get promoted back. York City followed the same route and it took them four seasons; five years, including a season curtailed on account of the pandemic. But it’s not all doom and gloom. York got back into the National League at the end of last season and are safely ensconced in mid-table. Stockport went one better. Promoted back into the National League in 2019, they won the title at the end of last season and returned to the EFL after 11 years away.
So there is a way back, but that’s for another day. Scunthorpe United have more immediate concerns today. At the time of writing, there has been no formal statement from the club on this matter, but if a winding-up petition has been been issued, they essentially have six options: pay the amount in full, seek to challenge the legality or enforceability of the petition, seek to make an arrangement to pay over time with the creditor, seek a postponement of the winding-up hearing, ignore everything and allow the petition to be converted into an order, or enter into administration.
If there are potential new owners close – and this has been stated by the club now for several months – then obtaining a postponement will be the most likely option. If the club can provide something substantive confirming that a takeover is proceeding and/or that the funds will be in place to dismiss the petition at a reasonable later date, they may get a postponement lasting several weeks.
This has certainly happened in the past; in fact, it’s happening right now. A winding-up petition brought against another National League club, Southend United, by HMRC on November 9 was deferred to January 18. Multiple postponements have been granted before, but there is always an element of risk. The matter is taken out of the club’s hands, and there’s nothing to stop a judge denying one and issuing the order.
Perhaps this is as bad as it gets for Scunthorpe. Bottom of the National League and having failed to finish above 20th in the league in any of the last four seasons. Perhaps the Maidenhead result will be the start of something better, and they can finally pull out of this mess, a state of affairs that has been going on for too long with too few people in a position to do so safeguarding this football club.
Perhaps it needed to be pushed to this critical mass moment, a point at which those who’ve done a lot of talking without taking enough action finally have to put up or shut up. Perhaps a new owner will arrive who understands both the challenges that face a club representing a community which has had substantially more than its fair share of hard times as well as the potential of a club that as recently as 2017 was finishing in third place in League One.
But the lingering suspicion remains that perhaps this might not be as bad as things get for Scunthorpe United, and there is plenty of downward space into which they can fall. It cannot be said that it hasn’t happened before. Considering the way in which the club has fallen in on itself in recent years, such anxiety is completely natural. But a postponement would only be a postponement, and the matter of Scunthorpe United has to be resolved. It is to be hoped that these takeover talks becomes something more than talks.
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