Written evidence submitted by Chester
Football Club
INTRODUCTION
1. Chester Football Club is a relatively new
club, formed in 2010, but with a history in the community going
back to the formation of the original Chester Football Club in
1885. The reformed club of 2010 is supporter owned through the
vehicle of an Industrial and Provident Society and came about
following the liquidation of Chester City Football Club in March
2010. The board of the new club welcome this opportunity to report
our ongoing journey to the Commons Select Committee and hope you
will find it useful and informative.
2. This report is a case study of our journey.
With reference to the objectives of the Commons Select Committee,
we believe our experience contributes valuable evidence on the
following matters in particular:
— Are
football governance rules in England and Wales, and the governing
bodies which set and apply them, fit for purpose?
— What
are the pros and cons of the Supporter Trust share-holding model?
3. In this report we will:
— Document
20 years of almost total despair with the club in private hands.
— Provide
evidence that the FA "Fit and Proper Person" tests are
toothless and not fit for purpose.
— Provide
evidence of poor governance caused by political agendas between
football's various governing bodies.
— Document
our rebirth following the inevitable liquidation after 20 years
of neglect from both owners and ineffective authorities.
— Demonstrate
that supporter ownership is not only viable, but is highly advantageous
from a business perspective and also a powerful catalyst for social
inclusion and civic pride.
THE SLOW,
AGONISING DEATH
OF CHESTER
CITY FC
4. The recent history of the club begins in 1990
with the loss of our old Sealand Road ground to developers following
financial issues which caused the club to sell up and play in
exile at Macclesfield's Moss Rose ground for two years. The club
returned to Chester to the newly built Deva Stadium in 1992, a
smaller but functional stadium at the bottom end of the Sealand
Road Industrial Estate.
5. Off field problems were never far away. Property
developer Mark Guterman was installed as chairman in 1994 and
his tenure saw the club face several winding up orders and threats
of player strikes for non-payment of wages. After a long and protracted
series of crises, the club finally went into administration in
October 1998 with Begbies Traynor appointed as administrators
by the courts.
6. Chester's main supporters' organisation during
this period of crisis were the Independent Supporters Association
(ISA). The ISA organised leafleting campaigns throughout the city
to encourage the local populace to attend matches in numbers to
help stave off the financial crisis. Fans of other clubs were
also encouraged to attend matches to show their solidarity with
the Chester fans. The ISA's efforts were acknowledged by the administrators
who went on record in February 1999 stating that without the commitment
of the fans, the club would have already folded.
7. In July 1999, the club was eventually purchased
and brought out of administration by American Terry Smith, son
of a wealthy North Carolina motor dealership owner and a former
American football player. His tenure was naïve and eccentric
to say the least. He got off to a poor start with the fans by
immediately appointing himself as manager and using American football
coaching techniques to coach a bewildered English "soccer"
team. Eventually Terry saw the error of his ways and appointed
Ian Atkins as manager, but it was too late and despite an heroic
effort by Ian and the players, backed by a mammoth "great
escape" campaign orchestrated by the ISA, the club were eventually
relegated from the Football League for the first time since their
appointment 69 years earlier, on goal difference, on the final
day of the season.
8. Life was not to be any easier in the Nationwide
Conference. Terry initially appointed Graham Barrow as manager
to appease the fans, Graham being a popular midfielder who had
played for the club from 1986-94. Graham's position was undermined
though with Smith interfering in first team matters, culminating
in Barrow being sacked at the end of the season despite a decent
8th place finish, a move highly unpopular with the fans.
9. The following season was a disaster. It started
with a stewards walkout, resulting in the withdrawal of the club's
safety certificate, and fans staging boycotts outside the stadium
due to Smith's chaotic reign. Gates fell to around 600, some 2,000
down on the average during the relegation season. A protest march
organised by the ISA saw fans carry a symbolic Chester City FC
coffin down Bumpers Lane to the stadium. A Supporters Trust, affiliated
to Supporters Direct, was also set up by the fans during this
period in November 2000. The club finished the season in the bottom
half of the table after avoiding another relegation. Terry was
eventually forced to admit defeat, and sold the club to boxing
promoter Stephen Vaughan in October 2001.
10. The internet age now being upon us, Chester's
fans forums were immediately besieged by supporters of Barrow
Town FC in Cumbria, Vaughan's previous club, warning us that his
tenure there had seen attempted asset stripping of their Holker
Street ground and an investigation into suspected money laundering
by HMRC. Vaughan, however, had come to Chester promising a great
revival and quickly delivered with investment into new players
under manager and former England defender Mark Wright. A first
season of consolidation saw a promotion push the following season
with Chester missing out following defeat to Doncaster in the
play-offs. With Vaughan apparently delivering and Chester fans
simply glad to see the back of Smith, the warnings from Barrow
were soon forgotten. Success finally came in season 2003-04 with
Chester promoted back to the Football League in front of a capacity
crowd at the Deva Stadium, winning 1-0 to Scarborough to secure
the title on 17 April 2004.
11. The good times were not to last, however.
A warning came even before the first game of the next season,
with Mark Wright being sacked on the eve of Chester's first game
back in the Football League. Vaughan soon followed in his predecessor's
footsteps, meddling in first team affairs under a string of short-lived
managerial appointments as the rot set in. The club became a family
and cronies affair with two of Vaughan's sons and several friends
on the playing staff matching similar appointments in the boardroom.
Late and non-payment of bills became the norm and fans and local
businesses alike became disenfranchised.
12. The club was now in terminal decay with fans
starting to drift away. The erosion accelerated in November 2007
when fans were asked to pay respects to a "major club benefactor"
who turned out to be a Liverpool gangster gunned down in a gangland
shooting. Crowds continued to drop with Vaughan racking up huge
debts proclaimed to be loans from his own businesses. The club
soldiered on for another 18 months before being relegated back
to the Conference at the end of the season and put into administration
in May 2009 with Vaughan claiming the debt to himself and his
companies of a staggering £4 million, much of it secured
through debentures.
13. A creditors meeting followed in June which
saw the club pass into the ownership of a new company, owned by
Vaughan, through a CVA which allowed no competition on favourable
terms to any rival bidder due to the presence of the debentures.
HMRC contested this CVA through the courts during the course of
the close season, and successfully challenged the level of debt
claimed by Vaughan-associated creditors, causing the courts to
annul the CVA.
14. Chester then became the pawn in a three-way
power struggle involving the Football Association, Football League
and Football Conference. Without the CVA, Chester should have
been prohibited from taking part in the Conference competition,
but the Conference came under intense pressure from the Football
League to accept Chester; relegated clubs being accepted into
the Conference being part of the contract for the two-up two-down
promotion and relegation places between the two Leagues. With
the two promotion places under threat, the Conference eventually
relented with clubs voting to break their own rules and admit
Chester into the league several weeks into the season. The FA
subsequently transferred the FA membership to Vaughan's new company,
but also fined the Conference for breaking their own rules.
15. Vaughan's desperate attempts to retain ownership
and cast aside debts had temporarily succeeded, but it was to
be short lived. He was disqualified as a director in November
2009 for an alleged VAT fraud elsewhere. Despite the events at
Barrow and the dubious CVA of the summer before, it was only this
event which caused him to finally fail the FA's "Fit and
Proper Person" test. Ownership of the club was subsequently
and quietly transferred to his son.
16. Fans were staying away in droves though and
crisis followed again in February 2010 when the club failed to
fulfil a fixture away to Forest Green Rovers due to players refusing
to board the coach until they were paid and the coach company
refusing to depart the stadium for the same reason unless paid
in advance. The next home game against local rivals Wrexham also
fell victim to unpaid bills, the police refusing to provide cover
for the event due to unpaid bills leaving the Safety Advisory
Group no choice but to revoke the stadium's safety certificate.
17. HMRC had also filed another winding up petition
against the new company, trading only since the previous summer.
A crisis meeting of Conference clubs was called due to the unfulfilled
fixtures and this time there was no hesitation. Chester, unrepresented
by anyone from the club, were expelled on 26 February and effectively
ceased trading. The result of the winding up order then became
a mere formality, and on 10 March 2010, 125 years of football
history in Chester came to a sorry and tragic end in a 30 second
hearing at the High Court in London.
CITY FANS
UNITED
18. Well, it didn't quite end there, and for
one simple reason. Football clubs are not limited companies or
PLCs. The heart and soul of any football clubs lies firmly with
its loyal supporters. Weary from the chaos of 20 years of mismanagement,
Chester fans once again rallied for one final, mammoth battle
to rescue their club from the abyss.
19. In August 2009, during the crisis of being
refused to play the first games of the season, Chester fans held
an emergency meeting and the seed was sown to merge the ISA and
Supporters Trust to form a new organisation which became known
as City Fans United (CFU). CFU was launched in October 2009 and
formalities were completed in December 2009 with the election
of the board.
20. 500 supporters packed the GuildHall in Chester
on 18 February 2010 with the crisis nearing its conclusion, to
hear from the board of their plans to re-launch a club should
it become necessary. Representatives from AFC Telford United,
FC United of Manchester and Supporters Direct were also present,
all experienced in forming new fan owned clubs through adversity.
The largest applause of the evening came at the end of a presentation
from Telford, who were by then fan-owners of a vibrant, thriving,
community-focussed football club, six years on from the liquidation
of Telford United. Chester fans were ready for what was to come.
21. The next three months saw huge activity as
the board put the business plan together with assistance from
Supporters Direct and three other fan-owned clubs affiliated to
them. With their guidance and support the structure was put in
place to form a new club following the events of 10 March. With
the lease to the Deva Stadium safely secured from Cheshire West
& Chester Council on 6 May, Chester Football Club was formally
re-launched on 20 May, fans again packing the GuildHall to witness
the unveiling of the new crest and hear encouragement from several
former players. Neil Young was appointed as manager the following
day and began to assemble his squad of players.
22. Membership of CFU had risen sharply during
the first half of the year as the phoenix first emerged tentatively
from the flames and then soared and took flight. Volunteers came
forwards in droves to help with much needed maintenance work and
redecoration of the stadium and to take on roles in the new club.
A major sponsorship deal with MBNA was secured. In addition to
sponsoring the club's shirts, they also provided the temporary
secondment of one of their employees, a lifelong Chester fan,
to work full time as CEO of the new club during the crucial setup
period. Positive news only was now flowing from the club; the
fans had hope for the future for the first time in years. The
scene was set.
CHESTER FC
How a community can make the world of difference
23. After a long pre-season, Chester played their
first competitive game against Warrington Town on 24 August 2010,
drawing 1-1. The first home game of the season on 8 September
saw 2,734 supporters turn up to witness a 6-0 victory against
Trafford, an attendance some six times larger than the 460 who
had witnessed the previous fixture at the stadium in February,
three divisions higher.
24. At the time of writing, January 2011, Chester
now stand 8 points clear at the top of the Evostik Division 1
North with home crowds at the now sponsor-named Exacta Stadium
averaging 2,359 in the league fixtures. The football side is up
and running, the club profitable and stable, but it doesn't end
there.
25. Chester Football Club is founded upon the
Club motto, "Our City. Our Community. Our Club". The
2,700 members, all of whom enjoy equal voting rights, made it
very clear to their elected board that they wanted a football
club they could be involved in. They wanted a football club that
was a cornerstone of our community; one that would be a source
of pride for them and the people of our beautiful historic city.
26. Key to this was our engagement with our local
communities. To this end, we have worked with our local schools;
our community coaches have been into over 40 different schools,
and worked with over 3,000 children, coaching them and educating
them in healthy lifestyle. We have given away over 2,000 tickets
to schoolchildren, and worked with local schools to incentivise
challenging children.
27. We have worked with children within our areas,
visiting community schemes, schools tournaments and working with
one of the local schools in these areas to deliver a seven week
year 8 PHSE course on making new beginnings. This course was delivered
with the local Fire authority, and will be rolled out to other
schools within the area over the coming months, this time with
involvement from Cheshire Police.
28. The Deva Stadium, for so long the pariah
of the footballing community within the city, has become the hub.
Local amateur and junior leagues use the facilities for meetings,
and all of the Chester and District FA finals are to be held at
the ground this year. This includes two days of junior and mini
soccer finals, where over 400 children will get the opportunity
to play at the best stadium in the city.
29. We are encouraging the children and youth
of Chester to shape the future of our game too, with 21 local
sixteen year olds currently on an apprenticeship scheme in sports
management at the Club. Cheshire FA refereeing courses are held
regularly at the ground, and the introduction of a youth development
programme for local youngsters has just been announced for next
season.
30. We have also worked hard to build up strong
relationships with our local health authority, who use our facilities
during the week for drop in clinics and for a less formal environment
to engage their mental health patients. We held a "think
pink" day for our local breast care unit, raising almost
£4,000 for them. They are one of many local charities we
work with.
31. Whilst we see a benefit from our community
programmes in developing a stronger supporter base, we take real
heart in receiving letters from our members telling us of their
pride that the Club they support and own is making a real difference
to people within our society. Our members feel, as we do, that
we are part of the Big Society, actively contributing to the greater
good of our community.
SUPPORTER INVOLVEMENT
THROUGH VOLUNTEERING
32. Another big part of the Chester FC business
plan was the ability to utilise volunteers. This was always a
concern of the board, as volunteers are often difficult to source
and motivate. What we have found has been the complete opposite.
Due to the success of the Club in building up a good reputation
within the community, and the very nature of being the Club owners,
our members have a massive sense of pride and belonging.
33. This has led to us being blessed with a volunteer
database that gives the business hundreds of work hours per month
for free. Our volunteers do everything and anything, from building
maintenance, to cleaning the stands and dressing rooms, and manning
our front office all day, five days a week. Our thank you to these
great folk, a Christmas party, had over 120 people on the invite
list. This level of supporter involvement gives people a real
feeling of ownership, which we feel is extremely important for
the longevity of the business.
34. There is a real co-operative, roll up your
sleeves spirit developing here. People will encourage others to
pick up their own litter, because if they don't, "one of
us will have to pick it up". A website appeal for people
to lay pitch covers results in 25 people turning up in minus 2
degree temperatures. This feeling of being in it together, a family,
was what we had missed all along. The football almost becomes
secondary, as "the Club" becomes the focal point.
35. The benefits of being a community focused,
not for profit Club as a business are tangible. The Club has sold
around 1,000 season tickets this season, a 20 year high. Attendances
at home are averaging over 2,300, the highest since 2004 (a Championship
year). We have sold over 1,000 replica shirts, 700 scarves, 600
tee shirts etc. Our shirt sponsors are the biggest employers in
the city, MBNA Bank of America, our three free stands have paid
sponsors, and we have sold out of match day, match ball and programme
sponsorships for the season. Not bad for a part time Club at level
8 of the national game.
36. Everything that we have achieved thus far
would not have been achievable were we not a supporter owned Club,
that was not for profit. We find that as a supporter owned Club,
garnering the trust of our community, our schools, sports clubs,
local authorities, business community etc was a lot easier than
it would have been as a privately owned Club. People and companies
are a lot more willing to be generous with facilities, time and
money, when they know that it will be used in the right way.
37. Football is a great vehicle and the ethos
of "using football for the common good" should, in our
opinion, be at the core of the Big Society programme. We have
got a long way to go, but out of massive adversity, Chester now
has a football club to be proud of. The people and the great and
good of the city are supporting it, and the community are benefiting.
So should communities everywhere.
ACKNOWLEDGEMENTS
38. The board would like to take the opportunity
to place on record our thanks to Supporters Direct, AFC Telford
United, FC United of Manchester and AFC Wimbledon for their incredible
support over the last 12 months in guiding and supporting us to
build a business plan and form a club. Finally, we pay tribute
to and thank our volunteers and supporters for the tremendous
backing they have given to their new club. The efforts of everyone
are now being well rewarded.
January 2011
| 
