At the start of the 1998 season, Soccer Tasmania led a move for clubs to distance themselves from their traditional ethnic associations on the initiative of Soccer Australia. it was felt that these associations were the cause of many of the problems and violence that plagued football in Australia. Although Phoenix did not have any obvious ethnic connotations, the club used the opportunity to rename itself as Clarence United Football Club. In their first season under their new identity, Clarence United again took the Division One title. After years of trying, Clarence United was finally able to secure entry into the Statewide League for the first time in the 1999 season. Their first season in the Statewide league was an awakening, and proved disastrous. Clarence finished last with only two wins out of sixteen matches, and a goal difference of −55. Even worse, after finally achieving promotion to the Statewide League after so many years of trying, the league was wound up at the end of the 1999 season because of financial troubles. Clarence returned to the Southern Premier League for the 2000 season, but they only fared slightly better, finishing second last ahead of South Hobart. Clarence finished second last every season between 2000 and 2003.