David Conn: Fire sales still leave Oldham in danger of falling out of League

Oldham Athletic were founder members of the Premier League in 1992, eagerly breaking away from the Football League and its century-long practice of sharing money, with several others who should also have known better: Norwich, Queens Park Rangers, Wimbledon, Sheffield United.

This week, after a wretched and at times nasty summer which has seen players drain away, Oldham, now in the Second Division and insolvent, made the inevitable announcement that they have gone into administration. If no saviour with £1.2m can be found by the end of September, the club will fold. They thereby became the 34th Football League club to be declared insolvent in the 11 years since the Premiership launched and football's bright new future began.

In this new era, Oldham's is a cautionary tale not just for English football's senselessly divided structure, but about the dangers of allowing clubs to be taken up by rich men wanting a vehicle for their own ambitions. Like so many, Oldham were running at a loss in early 2001 when the then chairman, David Brierley, a retired local businessman, advertised the club for sale in the Financial Times, whose classifieds do a decent trade in plaintive football clubs.

The arrival of Chris Moore made Oldham supporters feel they were among the lucky ones. Moore was, still is, the chairman of Torex plc, a company based in Banbury, Oxfordshire, specialising in supplying computer systems to the National Health Service. Torex that year turned over £132m, and made profits of nearly £17m. Moore owned a large chunk of the company, whose shares were then riding high at £7.50, valuing his personal stake at around £42m, and he also enjoyed a tidy income as a director - £437,000 last year.

Moore, who is from Stockport - a long way from Oldham in terms of the North West's regional rivalries - announced he was to back a five year route to glory for Oldham: Division One in three years, the Premiership in five.

Andy Ritchie, a Boundary Park legend for his striking feats in manager Joe Royle's outstanding side of the late 1980s and early 90s, was by then the club's manager. He signed Chris Armstrong from Bury for £260,000, but was sacked rapidly by Moore after rejecting the suggestion that he become the director of football.

Mick Wadsworth was appointed next and several more players were signed, but then Wadsworth too was sacked and in May 2002, a year after Moore arrived, Iain Dowie became his third manager.

Last summer, Dowie signed Clint Hill from Tranmere for £225,000 and Chris Killen from Manchester City for £200,000, although he told me this week that he did not negotiate their four-year contracts. Dowie claims the credit for signing the classy defender Fitz Hall from Chesham United, a club then managed by Dowie's brother Bob, and for taking his young team to fifth last season, and the play-offs, in which they lost to QPR.

By then, though, Moore had decided his football venture was over. In March, he announced in the match programme that the club's spending, mostly on the wages of the players signed in his time, exceeded the club's income by £50,000 a week. He had been footing the shortfall, his loans had swollen to £4m, and while he was resigned to losing that, he was not prepared to support the club and lose any more.

Moore has not explained in detail why he decided to pull out of Oldham, but perhaps the £4m had become more significant to him than in the tech boom just a year or so earlier. In October 2002, Torex shares had slumped by more than a third to a low of £2.20.

The fallout has been pretty horrible. Without Moore's financial backing, Oldham's bank account was frozen. Several staff left and the eight who stayed were not paid at the end of June. A procession of Oldham's better players were sold in July: Armstrong to Sheffield United for £100,000, Hill to Stoke for £120,000, Hall, the choicest prospect, to Southampton for £250,000, with Dowie seething that he was not consulted and had been negotiating with clubs who would have paid more. His relationship with Moore collapsed. "People say we've had a row but we haven't," Dowie said. "He just stopped returning my calls."

The Welsh midfielder Josh Low was sold at the end of the month to Northampton Town, for £165,000. Wayne Andrews, Tony Carss, Julien Baudet all left, and long-serving Lee Duxbury went to Bury with a bitter swipe at Moore, for selling the players "behind the manager's back". The low point for all concerned in this miserable tale was probably when a few fans travelled all the way to Banbury to burn an effigy of Moore outside the Torex head office.

Moore made his final exit by signing his shares over to Sean Jarvis and Neil Joy, the club's marketing and finance directors, and writing off his loans of over £4m.

"People ask me about Roman Abramovich," said Dowie. "I say that it's all okay as long as he stays for as long as the contracts he has taken on. We've been left in ruins."

The Oldham side which lost to Brighton in the first game of the season included four under-18 players who Dowie said could be ruined by being exposed too early, and three trialists, Matt O'Halloran, Mickael Antoine-Curier and Dave Carney, who were "not paid a penny" for playing.

Yet the fire sales and cost-cutting have not made a significant enough difference to Oldham's finances. The wage bill, according to Jon Newell, of PKF, the club's administrator, is around £210,000 per month, £2.5m a year, expected to swallow up all the club's income. The Inland Revenue are owed £400,000; they finally lost patience and issued a winding up petition, which led the club to seek the protection of administration.

The outstanding VAT bill is £120,000, and the trade creditors, the usual sad list of local council, utilities, public bodies and local small businesses amount to £800,000. They, Newell said, are likely to get nothing. Any deal to save Oldham requires £1.2m to pay football creditors, including £250,000 to the Professional Footballers' Association. So far, all the threatened clubs have scraped through, but sooner or later one will run out of options and be liquidated.

"Where I am pessimistic," Newell said, "is that I thought given how long the club has been publicly in crisis, somebody would have come forward by now."

A supporters trust has raised £180,000; the trust is planning to move to Supporters Direct's democratic structure and be part of the club's future - if there is to be one.

Chris Moore was unavailable for comment this week; his office said he was very busy because Torex is involved in another takeover and he was tied up in conference calls. Oldham Athletic meanwhile, 108 years old, bust and desperate, will be offered for sale again next week, in an advert in the Financial Times.