David Conn: Time running out for world's oldest league club

Football League loses patience and threatens to expel Notts County if they are still in administration at end of May

The horrible finances and fallen egos of sometime model club Leeds United claimed this week's headlines, but Notts County provided an even more potent symbol of the depth of football's crisis. The Football League finally lost patience with County, who have been in administration since June 2002, and delivered an ultimatum: If the club are not out of administration by the end of the season, 27 May, they will be expelled from the League.

It remains to be seen if the League will go through with its threat, but nevertheless, the game now faces a stark prospect: The oldest professional football club in England, and therefore the world, could go out of business in seven weeks.

How it came to this is, as ever, washed in local soap opera, but the broader context is of a football club which has played since 1862, a founder member of the world's first football league, now in potentially terminal crisis due to paying players excessive wages, ITV Digital's collapse and the pitiless, casino economics of modern English football.

Overseeing all this, most recently as chairman, was Albert Scardino, a curious figure to be so deeply immersed in Trent-side football affairs. A native of Savannah, Georgia, in the United States, he arrived in this country in 1993 when his wife Marjorie, now the chief executive of the Pearson media group, was appointed to head The Economist. A former journalist who is involved in charity work, Albert was looking for business opportunities, watched television millions pour into football in the mid-1990s and decided, along with many other speculators, that local football clubs were suddenly hot investments.

Having failed to take over Nottingham Forest in 1996, Scardino eventually turned to their neighbours across the river. There he had to come to an arrangement with Derek Pavis, a local plumbing merchant, now 73, who owned and ran Notts County for 14 years, during which he had paid for the building of the new West Stand, and had made £2m in loans to the club. Pavis agreed to pass his 90 per cent shareholding to Scardino for £300,000 if his loans were repaid. Scardino agreed to find the money for the club to repay Pavis in three instalments, but he was unable to secure the finance for the second and third payments.

A bitter contest followed between two characters who would struggle to be more different, while debts and wages piled up from a campaign launched by Scardino to win the club promotion to the First Division. Scardino raised some more money to enable the club to repay Pavis another slice, and took control, but he was still short of finance. ITV Digital's collapse, bringing a full stop to the idea of lower division clubs as vehicles to lucrative TV money, did not help much.

In March 2002, Scardino asked Nottingham City and County Councils to provide guarantees for £3.4m loans he was seeking from a lender, but although both councils are supportive, they found, as other councils have, that football clubs present too great a risk for public money to bail them out. They said "no" on 6 June last year. Eleven days later, Notts County were in administration.

At the time, they did not believe it would last a whole season, the long stretch which has finally prompted the League to issue its deadline. The administrator, Paul Finnity of Kroll Buchler Philips, was at first planning to provide the club with short-term protection from their £6m debts just to allow Scardino finally to pull off a deal. The City Council had agreed to help in a different way; Notts County's Meadow Lane ground sits on seven acres of land owned by and leased from the council, which prohibits use for anything other than football. This once provided protection for the club, but now the plan is to allow football to be squeezed into two acres, and for the other five to be available for redevelopment. Scardino was close again to obtaining a loan last year and in August Finnity said the funding "should be available within six to eight weeks". But it dragged on until December, then Scardino lost his backer again.

While Leeds fell to their current embarrassments by gambling on the Euro-dream, County are also victims of their own attempt to scale football's unequal strata without the wherewithal in place. Now, as with so many strapped lower division clubs, the money men are circling on property deals. The council's new lease is intended to make a profit seem possible and so attract an investor or at least provide some security for lenders.

Finnity said this week that discussions are continuing with investors and he was confident a deal would be done or agreed before the League's deadline. He has his own deadline anyway; he has kept the club going with directors' loans, gate and commercial income and the £250,000 accepted from Fulham to buy out the sell-on clause on the former County full-back, Steve Finnan. But Finnity's fees are expected to reach £300,000 – which he says is reasonable for nearly a year's work – and after 3 May there are no home matches to keep funding the club in administration. He needs to strike a deal or the club will go under.

The new lease means he has something more to offer than the football club's familiar, depressing mountain of debt, which includes £1m still owed to Pavis and more than £1.8m to Scardino, a sum which Scardino is likely to lose as a result of his short venture into the people's game.

NatWest Bank are the only secured creditor, owed around £700,000, but Pavis himself owns the West Stand and a property used to accommodate trainee footballers, estimated to be worth around £650,000 in total, which will have to be settled. The Inland Revenue is owed nearly £400,000 and Finnity will be expected to provide more than the 10p in the pound settlement recently made by Leicester City's administrators. VAT is £105,000, while the total unsecured creditors, besides the loans from Pavis, Scardino and the other directors, are £1.5m. As at all the bust football clubs, that figure includes public money and money owed to ordinary businesses who can ill-afford to lose it, but they are certain to receive little.

Finnity is understood to be looking for between £2.5m and £3m for the club, which includes the new lease, but the council will only grant it to somebody who can assure them there is finance to keep the club in business. Notts County are running at a hefty loss, with players' wages by far the biggest expense, and although some contracts finish at the end of this season, leaving 12 players on contracts, any investor will have to show at least £1m to shore up the club.

Overall, if the club is to survive beyond the deadline, Finnity must find somebody prepared to commit, very soon, to paying around £4m for the privilege. He said there are at least two consortia looking at it seriously.

Scardino said he is still trying to make a deal happen for the benefit of the club: "If all the parties agree, a property development could work. But it's complicated and it'll take time." He said he might be involved in some capacity, but: "The idea of me taking over has gone. For legitimate but painful reasons, the council could not provide guarantees and other financing proved impossible. I have learned that this economic model of football does not work."

A newly-formed supporters trust held its public launch last night, its members determined to play a part in the club's future. They are hoping for a deal similar to that done by the inaugural, flagship supporters trust at Northampton Town, whose ground was also owned by the local council. In return for money put into the club from membership fees and fund raising, the council wrote into the lease that the club had to have a Trust representative on the board. The Notts Trust spokesman, John Thornhill, said: "We're the only people involved who are concerned solely with the club itself, with keeping it going because we value it, not for any property deal or trying to make money out of it. As such, we believe it is right for us to have an involvement. We are talking to everybody and the council is very positive."

Notts County fans, he added, are far from weary of their oft-trotted out status as the world's oldest professional club: "We haven't exactly had hoards of trophies to boast about in our 141 years, but that history is something to be proud of, which nobody can take away." The sad spectre for the mess football has got itself into is that if nobody fancies Notts County as a piece of property speculation within seven weeks, the club itself could be gone for good.

davidconn@independent.co.uk