Macclesfield Town: Covid Induced Chaos
In 2003, two Iraqi brothers described as ‘genuine fans, and eager to move the club forward’ by Macclesfield Town Chairman Rob Bickerton, assumed control of Macclesfield Town Football Club. Their names were Amar and Bashir Alkhadi and they will forever be remembered as the owners who drove Macclesfield Town to their demise
Eternally in the shadow of the two Manchester clubs, City and United, Macclesfield Town attracted one of the smallest average attendances in their final year as a professional club, with only 1998 fans attending per match in the 19/20 EFL League 2 season.
“Amar and Bashir are genuine fans, and eager to move the club forward”
It was to bolster their paltry average attendance that Macclesfield Town flirted for the first time with financial ruin. The year was 2003, and Macclesfield had benefitted from the Football Association (FA) decision to provide funding to build a new £1.5 million stand via a grant administered by Football Stadia Improvement Fund, which was created following the Hillsborough Disaster in 1989.
FA rules at the time stipulated that up to 80% of the costs of a new stand could be covered by the FSIF grant, but Macclesfield attempted to circumvent the law regardless. Instead of securing external funding for the final 20% of the stand, Macclesfield utilized the grant money to fund all of the stand, a clear breach of the rules. Furthermore, in order to fall back in line with FA regulations, the club negotiated a ‘sponsorship agreement’ with the main contractor of the stand, Alfred McAlpine, worth £245,000 over 10 years, which would act as a ‘refund’ of the grant money provided. The FA were not happy.
Hit with a monumental fine of £300,000 and with the imminent threat of administration looming, the club appealed to their new owners to help pay the costs. Amar and Bashir however, were only willing to commit £30,000. The reason? They were not willing to pay for the ‘previous owners mistakes’, despite the fact that they were described as ‘genuine fans, and eager to move the club forward’. Puzzling.
“We are not willing to pay for the previous owner’s mistakes”
Nevertheless, after an intensive fundraising campaign, the Silkmen, as the club is affectionately known to their supporters, pulled through. By 2008, things were looking up for Macclesfield. Beloved by their fans, the Alkhadi brothers had transformed the ailing finances of Macclesfield into a club that was ‘completely debt free’, according to an interview with The Guardian that very same year. Publicity stunts, such as the hosting of the Iraqi National Football Team for a friendly fixture in 2007 and the short-lived signing of 21 cap Iraqi international Jassim Swadi meant that the club was finally enjoying their moment in the limelight.
Little did Macclesfield Town supporters know that under the stewardship of the Alkhadi brothers, that would be their zenith. The brothers, who had ‘claimed to have invested £4,000,000 in the Football Club’ (the exact amount of their investment is not known, due to Macclesfield not making their accounts public), slowly began cutting off the levels of their investment to the club, with their financial inaction leading to eventual relegation from League Two in 2012.
During this period of decline, the club was also rocked by tragedy. Manager Keith Alexander, who had been in charge of the Silkmen for two years, passed away after a brain aneurysm in 2010. 10 months later, first-team regular Richard Butcher also passed away from a sudden illness, a double blow which shook the club to its very core. By 2013, the club was in serious financial trouble. Despite a stirring FA Cup run, which saw the Silkmen defeat Championship Club Cardiff City in the third round, the club was deeply indebted to their creditors.
Lowest Average Attendances in the 2019/20 EFL League 2 Season
Despite the club selling the freehold of their Moss Rose ground to the East Cheshire County Council for £285,000 and proceedings being initiated for the club to become a Community Interest Company (CIC), in which all of the loans owed to the club by its owners and directors are written off, the club required an additional £100,000 to survive.
After scraping the money required- just, which prompted Bashar Alkhadi to resign from the club’s board of directors, making Amar the sole chairman, the CIC plan collapsed due to… you guess it, ‘outstanding debts to creditors’. Between 2013 and 2018, the club, despite its ongoing financial troubles, finished in the top half of the Conference, and in 2018, won promotion to League 2 as champions.
As financial woes deepened even more off the field, the Silkmen, led by former England international Sol Campbell, escaped the trapdoor of relegation on the final day of the season, after being in the relegation spots from matchday 2 to matchday 41. Perhaps relieved at surviving in the Football League, where TV revenues and gate receipts are significantly higher than in the Conference, Silkmen supporters could have been expected to think that their second season in the fourth tier would have been a little less dramatic than the first.
They were very wrong.
Macclesfield’s doomed 2019/20 season began in the best possible way, when a group of disgruntled players, incensed at the club’s failure to properly pay their wages on time, began a winding-up petition against the club. David Seligman, a lawyer representing one of the players to participate in the winding-up petition, commented that ‘at no point did they want Macclesfield Town to go out of existence, they just wanted what they were owed. They aren’t Premier League footballers, they are earning very modest salaries, living month-to-month, paying rent, for food, for their children, and they couldn’t afford it’.
Eventually, the players were paid, but worse was yet to come when influential manager Sol Campbell resigned just mere days prior to the beginning of the 19/20 season. The reason for his resignation? A staggering £182,000 in unpaid wages.
“At no point did they want Macclesfield Town to go out of existence, they just wanted what they were owed. They aren’t Premier League footballers, they are earning very modest salaries, living month-to-month, paying rent, for food, for their children, and they couldn’t afford it’. ”
Manager Daryl McMahon was appointed as his immediate successor, but he too was gone after 4 months in charge, with the club 22nd in League Two, having been awarded a 6 point penalty after failing to fulfil a fixture against Crewe Alexandra. Further postponements occurred against Plymouth, where the club was served with a ‘zero-capacity order’, shutting down their home ground.
More strikes by the first team against 7th tier Kingstonian in the FA Cup meant that Macclesfield entered the Coronavirus pandemic in a precarious state. A 10 point penalty suspended penalty was looming large over them and if applied at the end of the season would result in relegation back to the fifth tier. On the 23rd of April, the Silkmen placed all of their playing and coaching staff on furlough, with a club representative saying that this would ‘help safeguard the roles of all those employed by the club’.
Lurking in the shadows was the threat of another winding-up petition, this time by HMRC over the subject of £72,000 unpaid tax. Time and time again, the club managed to seek postponements of their repayment with Alkhadi saying that the club was ‘close to a takeover’ on multiple occasions, with local entrepreneur Robert Benwell being mentioned as a potential buyer. No firm offers came in for the club, who now owed over £700,000 in total to creditors, players and staff.
The club appeared to have secured salvation from relegation when the 2019/20 season was curtailed on the 6th of June, but the EFL, who had appealed against the points deduction, which they thought was ‘too lenient’, given the nature of Macclesfield’s violations had the last laugh. After having finished one point ahead of Stevenage, who occupied the last relegation place in League 2, Macclesfield was deducted a further 4 points due to ‘failing to pay a number of players on the applicable payment dates due in March 2020, failing to act with utmost good faith in respect of matters with the EFL and for breaching an order, requirement, direction or instruction of the league’.
“Macclesfield failed to pay a number of players on the applicable payment dates due in March 2020, failing to act with utmost good faith in respect of matters with the EFL and for breaching an order, requirement, direction or instruction of the league’. ”
Condemned to the fifth tier of English football, where TV revenues and gate receipts are appreciably lower, the club was doomed. On the 9th of September 2020, and with no buyer seemingly willing to pay off the debts owed by the club, judge Sebastian Prentis ruled Macclesfield Town insolvent with their name struck off Companies House and their FA license revoked.
Many fans feel the blame lies squarely at the feet of the Alkadhi brothers. In 2019, a volunteer of the Silkmen Supporters Trust (SST) commented that ‘There is a poison pervading the club. We just all feel so impotent – that’s the main concern.” This was a problem that was further exacerbated by Alkadhi openly acknowledging the club as a ‘money-losing business’.
“The club is a money-losing business, so it does not serve me at all to spend time on getting things right here.”
This neglect is clearly seen in the unaudited financial records for the 2019 fiscal year, where the football club only had a paltry £4,327 of cash at hand. Furthermore, the club owed £1,178,602 to trustees, players, staff and creditors, a huge sum for a club which had the lowest average attendance in the Football League. The club’s turnover, which was unreported on 2019’s financial statements, is estimated to be £2.1 million, based upon the figures released by the club in 2012, the year the club was relegated to the National League.
A large majority of this turnover originates from the distribution of the TV rights for the entire EFL. Under the current rights formula, which is valid from 2019 to 2024, the EFL receives £119,000,000 in TV broadcast monies. This sum is split amongst the Championship, which receives 71% (£84,900,000), League One, which receives 17% (£20,230,000) and League Two, which receives the remaining 12%, worth approximately £14,280,000.
Assuming that this TV revenue is split equally amongst the 24 member clubs of League 2, each club would receive £595,000 per year or in other words, 0.5% of the original £119,000,000 given to the entire EFL.
Basing ourselves upon the estimated yearly turnover figure of £2,100,000 for Macclesfield Town, the distribution of TV monies attributed to 28% of Macclesfield Town’s yearly revenue, a staggering figure. A further £902,000 in prize money and solidarity payments’ from the EFL and the Premier League make up an additional 43% of the Silkmen’s estimated turnover.
Any suspension in the calendar, such as that incurred by the proliferation of the pandemic in England, would have dealt a fatal blow to the Silkmen’s ailing finances.
Take for example Plymouth Argyle, who won promotion to League One in the truncated 19/20 season. Considered one of the best-run clubs in the division, the club incurred a £700,000 loss in the 2019/20 season, primarily due to the ‘suspension of the season and the annulment of planned events’.
If Plymouth suffered such bruising losses, one can only expect the Silkmen to have suffered an even more cruel blow to their finances, which they sadly could not resist.
It is undoubtedly clear that under the negligent ownership of Alkadhi, the Silkmen would have eventually fallen into administration. The Coronavirus crisis simply meant that the fatal blow came much earlier than expected.
