Who next as the Quakers are hit by credit crunch?

Feb 26 2009 by Mark Douglas, The Journal

League Two Darlington became football’s first victims of the credit crunch when they were placed in administration yesterday. Mark Douglas reports on where it all went wrong for chairman George Houghton

FOUR camera crews, a clutch of radio microphones and a room full of journalists crowded the media room deep in the bowels of the cavernous Darlington Arena yesterday afternoon.

The irony of such intense coverage of the announcement that Darlington have toppled into administration with debts of around £5m will not be lost on those who have fought a losing battle to whip up interest in events on Neasham Road.

While Manchester United and Arsenal’s Champions League games provided entertainment for free on television, less than 3,000 turned up for the Quakers’ promotion clash with Rochdale on Tuesday night – half the amount required for the club even to break even. Apathy is not the sole reason that the club finds itself in the hands of administrators for the second time in six years, but it is a major contributing factor. Thanks to the ambition – some would say vanity – of former chairman George Reynolds, Darlington are saddled with a superb state-of-the-art arena that houses 27,500 seats but hardly suits a club with League Two status.

It has been filled once, for an Elton John concert, while crowds for the football team remain miniscule and the atmosphere awful. Even last season’s promotion push couldn’t get the town out to support the club in big numbers – and repeated appeals from current chairman George Houghton for more support have fallen on deaf ears.

Reynolds claimed yesterday that the stadium was not too big and would have been filled if the club had made it into the Premier League.

But his wild ambition sounds somewhat jarring as the club spiraled into administration again yesterday, chairman Houghton saying he had “no choice” but to relinquish control.

Houghton painted a worrying picture of the club’s ill-health, revealing that Darlington have £4m of debt and are losing £54,000-a-week. Administrator Dave Clark last night placed that debt nearer the £5m mark. Houghton has personally plunged £1.1m into the club since Christmas and, despite repeated appeals for more support, the club’s attendances have seldom broken the 3,000 mark.

It is a worrying situation – but not completely without hope.

Mr Clark, appointed to oversee the club on behalf of Brackenbury, Clark and Co, was upbeat when facing the Press last night, suggesting that the club had plenty of appeal.

And lawyer David Hinchcliffe, who had worked on the administration cases of Rotherham, Bradford City and Leeds United, said that the club’s position is nowhere near as bad as those that he has worked with previously. Clark said: “I think it’s actually quite positive. We’re certainly looking at it from a positive point of view. We have a successful team playing at the right end of the table, which is unusual in an administration situation. We have good facilities, a good manager and good staff.

“We’re in a situation where the whole feel of the club, bar the administration process, is actually quite positive. We have a chairman who is prepared to support and assist us in our attempts to sell the club, and is prepared to discuss with a potential purchaser future involvement after we’ve completed our tasks.” In the medium to long-term, it is hard to see a future that doesn’t involve Houghton involved in some way.

Although he is unable to shoulder the burden of the club’s finances on his own, he has pledged to continue bankrolling the club if additional investors willing to pump figures of around £200,000 a year can be found.

Anyone keen to take sole control – and they will not get the ground, which is still owned by Houghton – will be required to provide proof of £2m of funding. In the current financial climate, that appears unlikely.