Death of a dream

This latest devastating blow to Scottish football means that by the end of the week, the Bank of Scotland Premierleague will have a quarter of its membership in administration, as Livingston follow Dundee and Motherwell in seeking respite from their creditors, of whom by far the largest is the Halifax Bank of Scotland plc.

Last night chairman Dominic Keane pointedly refused to deny Scotland on Sunday’s assertion that his club would go into administration imminently, saying: "if that’s the story you’re running then that’s fine."

Unlike Dundee and Motherwell, the club’s descent into financial crisis is not linked to the budget of the playing side but to its involvement with the troubled Stadia Investment Group (SIG) set up by Gavin Masterton, the former treasurer and managing director of the Bank of Scotland, who is reported to be selling his stake in the company.

SIG’s other main shareholder is John Yorkston, the chairman of Dunfermline Athletic, and there may be resentment in Livingston that Yorkston’s club seems relatively unaffected by SIG’s troubles.

Livingston had a 75% share and SIG the remaining 25% of a joint venture to develop offices and other facilities around the club’s City Stadium at Almondvale in the West Lothian town. The offices in particular are understood to have failed to meet rental targets.

Scotland on Sunday can reveal that it was the debt mountain created by Livingston’s investment in these office developments which finally overwhelmed the club’s already precarious finances.

Masterton said last night that he did not know about Livingston going into administration but added: "It was a joint venture which hasn’t worked out as we planned and that is very sad for all of us."

Only last week the SPL voted to impose a ten-point penalty on any team in administration, and fans of Livingston, Dundee and Motherwell face the nightmare prospect of their clubs starting next season with a ten point disadvantage.

With Hearts also facing the possibility of administration unless they move to Murrayfield, according to the club’s chief executive Chris Robinson, the SPL appears more and more like a financial black hole.

Administration became necessary for the Lions when HBOS, as they have done with other clubs, refused to allow Livingston any further overdraft or loan facilities.

Frantic efforts were made to stop news of the steps to place the club in administration leaking out before Tuesday night’s CIS Cup semi-final with Dundee in a bid to avoid distracting the players.

Livingston officials held secret meetings with local politicians to discuss a way forward for the club that would avoid control of the finances being taken from Keane. Significant pressure has also been put on the bank in the past fortnight by the club’s hierarchy, urging them to refrain from "hasty" action.

Keane claimed in May last year, after the club posted debts of 8m and a loss of 500,000 for the year up to June 2002, that he would "never take chances" with Livingston’s finances and that his club would have "no difficulty" in servicing the debt.

He said at the time: "Our debt has risen over the past year or two, but the money has all been used to finance the extensive work which has been done in and around the stadium. We’ve acquired the debt through a period of intense investment but hopefully it will disappear just as quickly.

"There will be no difficulty in financing our debt over the next few years. The bank have lent us this money very recently because they know we are investing for the future. These plans for the stadium were put in place to grow the business. The priority at the moment is simply to get the work done.

"The value of our whole stadium is nearing 16m and I would consider the investments we have made as having appreciative value. We’ve put 4.5m into the office development at the north west corner of the stadium, 1.5m into the nightclub and over 1m into the conference and banqueting facilities in the Almondvale suite.

"That’s 7m accounted for before you start to look at things like the five-a-side pitches and field-turf. These are all things which will make the club money in the long-term.

"Our wage bill is nothing like many other clubs and we have not pumped all this money into the playing squad where the market has suffered badly. At this stage we are not uncomfortable with our financial position."

Then, in December last year, Keane admitted he would be pushing the SPL to ask the Scottish Executive to create an emergency fund for cash-strapped clubs as Livingston’s own situation became increasingly perilous.

He said at the time: "The game is seriously ill and we need to do something about it. Football is our national sport and is of massive importance to this country - when one of our major industries is threatened then I think there should be every attempt made to try and save it.

"I think that the SPL should look at initiating discussions with the Scottish Executive to set up some kind of emergency fund to try and see clubs through, maybe for a period of four or five years."

It is thought the ill-fated recruitment of Marcio Maximo cost Livingston a considerable amount of money. On top of a substantial salary, the Brazilian invested large amounts of club funds - including 5,000 on training equipment primarily consisting of tennis balls and cones, most of which remains unused - during his three-month reign. Maximo also lived at the club’s expense in a Livingston home bought by Keane for club use.

Almondvale Stadium is owned by West Lothian Council and leased to Livingston FC. The lease includes the surrounding land, car parks, the full-size all-weather football playing field and all-weather five-a-side pitches.

The club has already seen the development of new office blocks, Stadium House, at one corner of the stadium and has planning consent for an identical office at the south-west corner of the stand, as well as a hotel at the front of the same side of the stadium.

As ultimate owner of the land, it is thought that West Lothian Council will play a crucial role in the effort to preserve Livingston as an SPL club, but no local authority can directly subsidise football clubs following a ruling by the European Commission over municipal stadia in Italy.

Keane was last night unwilling to discuss the administration process, and as with Dundee FC he and other directors will have been warned to stay silent in advance of the appointment of an administrator.

"I don’t have a comment to make because I can’t discuss things like that," said Keane. "You know me, I only want to talk about football, but if that’s the story you’re running then that’s fine.

"I’m just looking forward now to Tuesday night, which is a massive occasion for everyone at Livingston Football Club. I’ll be there at Easter Road for the match so you can tell your sources that."

As yet another seemingly well-run club goes into administration, there are bound to be calls for government intervention in what appears to be the collapse of the national sport.

Questions are also sure to be asked about the role of HBOS and also Gavin Masterton in what appears to be the long-predicted fate of Scottish football - the domino effect where one club goes into administration and the rest follow.