src=”images/articles/southend02112009.jpg” style=”float: left; height: 235px;”/>League Two Southend United avoided their latest winding up petition at the High Court earlier this week, yet they remain a long way from financial stability.
The Essex club reportedly owe £150,000 to loan company Charterhouse Commercial Finance Plc, who put forward the bid to place the club in administration. However the club claim that their total £350,000 worth of debt has been cleared. The Shrimpers avoided another winding-up petition earlier this month, this time from Her Majesty’s Revenue & Customs (HMRC) who applied to place the club in administration over unpaid taxes, however it was settled as the club and HMRC reportedly reached a deal despite the Revenue claiming that the football club was insolvent, proven by its history of evading payments. The settlement by no means meant that Southend are secure however, with the club warned that should they fail to meet payments in the future, they will once again be in court.
Southend’s chairman Ron Martin claimed that the club were able to settle all outstanding debts mainly thanks to a partnership with the supermarket Sainsburys, who aim to build a new store on the site of the Shrimpers’ current home, Roots Hall. The club will then use the funds from the sale of Roots Hall to fund a new stadium, which Southend hope will generate more income with a much greater 22,000 capacity and additional revenue streams from a hotel, conference facilities and retail. However, the club has had full planning permission for the stadium for two years, and fans are starting to grow inpatient with a lack of progress which could be pivotal to the club’s future.
Southend had been under a transfer embargo since the end of last season over their finances, which was lifted after their agreement with HMRC. The club were quick to register seventeen new players for the season, with the Shrimpers fielding a new-look side this season after new manager Paul Sturrock was unable to make any signings in pre-season due to the embargo.
Last season’s relegation and the departure of long serving manager Steve Tilson saw the end of the most successful era in the club’s history in which they went from League Two to the Championship after successive promotions in 2005 and 2006. Among the highlights of their rise through the divisions was the Shrimpers’ shock Carling Cup victory over a Manchester United side that featured Wayne Rooney and Cristiano Ronaldo at Roots Hall in 2006, with prolific striker Freddie Eastwood, soon to be sold for a club record fee of £1.5m to Wolverhampton Wonderers, scoring the solitary goal. Since the club’s relegation from the Championship in 2007, a number of star players have left Essex, amongst them Lee Barnard who left for a seven figure fee to League One Southampton last season, with the club bringing in much-needed funds as they struggled to pay staff wages, forcing the club to take loans from the PFA to pay their player’s salaries.
It is expected that the long-term security of the club depends on the success of its move to a new stadium, with the new revenue streams making it easier for the club to manage its finances. As Southend adjusts to life in the fourth tier of English football for the first time in 6 years, the club and fans alike will just hope there is still a Southend United at the end of the season.