EXCLUSIVE: Quakers bombshell (From The Northern Echo)

EXCLUSIVE: Quakers bombshell

1:30am Wednesday 25th February 2009 in

Exclusive By Chris Lloyd » Deputy Editor

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DARLINGTON Football Club is highly likely to go into administration this morning, the Northern Echo understands.

Rumours began circulating within the club after last night's game that chairman George Houghton's two-and-a-half-year reign was nearing its end.

When contacted by the D&S, Graham Robb, partner in the club's PR firm Recognition, confirmed that adminstration was a "strong possibility".

Administration means that an outside firm of financial experts is appointed to find ways of maximising the club's assets to pay off its outstanding debts. Under Football Association rules any club going into administration is docked ten league points.

Speaking after midnight this morning, Mr Robb said: "At this moment, no administrator has been appointed, but it is well known that Mr Houghton has had ambitious plans for the club's future. Those plans have revolved around using rental revenue from developing land around the stadium to support income from match tickets. The plans have suffered from a lengthy planning process and the recession which has driven down football attendances."

Despite last night's 2-1 defeat to Rochdale, the Quakers - who are celebrating their 125th anniversary - have been in the top ten in League Two for much of the season and are in with a realistic chance of securing a play-off place.

Mr Robb continued: "The chairman has been able to bring the club's management costs under control and the team is having a better season. Any plans for the future will be predicated on the possibility that new financial arrangements can be found."

Mr Houghton, 69, is a successful Tyneside property entrepreneur with interests in nursing homes. He has projects in several countries, including America, China and Gibraltar. He bought the club in March 2006 from Stewart Davies of the Sterling Consortium.

The Football League's complicated rules say that a club which goes into administration before the fourth Thursday in March will be immediately docked ten points.

Automatic promotion is considered unlikely for Darlington this season, and while any punitive action by the FA will undoubtedly harm the club's play-off push, it is to be hoped that it will not damage it fatally.

The Sterling Consortium gained control of the club in May 2004 after George Reynolds' colourful time as chairman.

Mr Reynolds took the club from its traditional home of Feethams and developed an enormous 27,500 seater stadium on the edge of town. However, his time in charge ended in December 2003 when the club went into administration owing the Inland Revenue in excess of £400,000. Mr Reynolds was subsequently jailed for tax evasion.

In May 2004, the Sterling Consortium, which had loaned Mr Reynolds money to build the multi-million pound stadium, took the club out of administration as the best way of protecting its investment.

The Consortium then sold it on to Mr Houghton, a football enthusiast who said he hoped to be "banging on the Premiership's door" within five years.

However, attendances never matched his expectations. Last season - the club's best for eight years - saw an average of about 3,100; this season, before last Saturday's match, the average was down to 2,900.

Mr Reynolds always maintained that between 5,000 and 6,000 paying fans were needed to enable the club to break even.

In February 2008, Mr Houghton appealed for greater support, a plea he repeated when attendances disappointed at the start of this season.

As well as trying to increase attendances, Mr Houghton attempted to raise revenue by developing the Neasham Road site. In April 2008, he was given planning permission by Darlington Borough Council for a £12m development which would include a 100 bedroom hotel, offices, cafe, pub and training academy featuring three outdoor and ten indoor pitches. However, the collapse of the world's capital markets has left the project unable to get off the ground and Mr Houghton dependent upon dwindling gate receipts.

The one successful non-football revenue earner was Sir Elton John's sell-out concert in July 2008.

To assist in the development of the club, Stockton entrepreneur Raj Singh was appointed the club's first vice-chairman in December. He is the owner of the £30m Prestige Group of care homes. It is understood he resigned as a director a couple of weeks ago, although he was at last night's match.

Initial indications from fans last night was a weary "here we go again" attitude. One said: "We've been in this predicament before and always, somehow, come through. We can only hope that we will again."

Comments(25)

DARLO IN NEW ZEALAND says...
3:52am Wed 25 Feb 09

I can't believe it. How could this possibly happen again? Unbelievable! I'm shocked and saddened.