Newton Heath LYR, or “The Heathens” The LYR stood for Lancashire and Yorkshire Railway and was added to distinguish this club from Newton Heath Loco (who were part of the Motive Power Division of the company). The team was started in 1878 by the railway workers of the Carriage and Wagon department. The team played on a ground close to the railway yard in North Road. Here they played matches against other departments or other railway companies. Newton Heath played in shirts that were half gold and half green and was run by the Dining Room Committee of the Carriage and Wagon Works.
In 1888, the Football League was formed, but the players of Newton Heath did not think they were good enough to join and compete with established teams such as Blackburn Rovers and Preston North End. However, in that same year, the team did not lose a single home game until October (when they were beaten by a Canadian side). In 1890, Newton Heath, looking for more challenging opposition, applied for membership of the Football League. This application was turned down, as they only received one vote. Newton Heath was not deterred by this and instead joined an organisation called the Football Alliance. This group would eventually become the Second Division. During this time, attendance at their matches began to increase, reaching over 2,000. Newton Heath began to sever their links with the railway company and the letters ‘LYR’ were dropped from their title. The club appointed its first full-time official, AH Albut. Newton Heath set out to impress the League and finished as runners-up in the 1891-2 season. In 1892, after three more applications, they were elected as new members of the League. At this time the League expanded and the Second Division was created. Newton Heath joined the First Division, and local rivals Ardwick (MCFC) , joined the Second Division.
Their first season in the League was not great. They lost their first match, which was against Blackburn Rovers, and went on to play a further six games without a win. The club finished at the bottom of the table, having conceded 85 goals and managed only 18 themselves. However, they remained in Division One after beating Small Heath in a ‘test match’.
In 1893, they were forced to move from their North Road ground due to a rent increase. The club moved across Manchester to a ground at Bank Street, Clayton. This new ground, however, was not ideal as the pitch was made up of sand, mud and patches of grass. An article written that year in the Birmingham Gazette put Newton Heath in even more trouble. The article claimed that Newton Heath had been using brutal methods to win matches and the Football Association needed to deal with the matter. A court case soon followed. The year after, as Newton Heath fought for survival, the Manchester Civil Court judge granted the team one farthing in damages, and ordered that both parties must pay their own costs. This was a massive setback for the club.
That same year, after losing a play-off match against Liverpool, the club was relegated to the Second Division. They were to remain there for a further twelve seasons. In 1897, Newton Heath managed to make it to the play-offs, but this was as far as they managed to get. The following season, local rivals Manchester City leapfrogged them and were promoted to Division One. Morale within the club began to fall as the their game worsened and attendance at their matches dropped.
Newton Heath soon found itself facing serious financial problems. In 1902, Newton Heath’s President, William Healey, took them to court to apply for their compulsory winding up. Healey was owed £242 17s. 10d., which was a lot of money in those days. The club was declared bankrupt, after being found £2,600 in debt.