Often Partisan

Football League Tightens Up Administration Rules

The Football League has announced various measures dealing with insolvency agreements following their Owners’ and Executives’ Conference and AGM that seeks to change ownership within football for the better.

As announced on BCFC.com, there are a wide range of measures being brought in ready for next season. These include:

  • an increase in points deduction for clubs going into Administration to 12 points from 10.
  • Administrators being required to market a club in admin for a minimum of 21 days during which time they will be required to meet the relevant supporters trust for the club to give them the opportunity to make a bid
  • Removal of the requirement for a Company Voluntary Arrangement (CVA)
  • Requiring purchasers of clubs in admin to pay creditors a minimum of 35p in the pound over 3 years (or 25p on transfer of share) or face a further 15 point deductin at the start of the season following the insolvency event.
  • Continuing the FL’s commitment to the controversial Football Creditor rule which ensures all football debts are met in full prior to any other including HMRC.

I think the FL are doing what they can to learn from the mistakes of the past few years, and trying to create a fairer, more equitable solution. As with anything, none of the changes are perfect but I can see what they are trying to achieve with each of them.

The one that intrigues me most is this threat that if a certain percentage of a debt isn’t paid off then a further points deduction will take place. On the one hand, I think it’s a good thing in that it will prevent the smaller businesses getting as badly affected when a club goes under and maybe block some of the worst vultures from picking up clubs on the cheap. On the other hand, I think it could result in clubs being liquidated as I could see a situation whereby prospective purchasers feel it’s not worth picking up a club to pay off that much debt or take the points hit. I think it’s a sop to keep the Football Creditor rule in place – a rule which is ridiculous in that it protects players (often who are on inflated salaries that have caused the issue in the first place) before the “little guys”.

I also think it’s interesting that the FL are to force administrators to market a club for 21 days and to talk to Supporters Trusts. I think this is a stab at trying to avoid the “pre-pack” kind of administrations where an owner dumps a club into admin, and then buys it back under a new name to get rid of debts, while giving fans the notion that they could be the saviours of their own club. I’m not sure it will work – while administrators will be required to do these things it doesn’t mean that they will actually take any notice of supporters trusts or other bidders – and as such it might just be adding three weeks to a process as a sop to the FL’s conscience.

I accept I’m probably quite cynical about this sort of thing, but I can’t help it. I know that restraint of trade rules mean that the FL have to be careful how they word things but as we’ve seen with FFP, with expensive enough lawyers and accountants it’s possible to try to wiggle a way through all the loopholes.

At this moment in time nothing affects Blues – while BIH are in receivership this isn’t an insolvency event and as we are repeatedly told, neither the club nor BIH are close to the dreaded A word. I’ll be interested to watch what happens the first time a club falls into the admin trap under these new rules – and to see if it makes any difference.

Talking Points sponsored by John Hicken Industrial roofing and cladding materials

Tags: ,

14 Responses to “Football League Tightens Up Administration Rules”

  • Bluesfan says:

    This is a wrong and crazy rule and something should be done about it the club and fans shouldn’t suffer for this it should be the FA/League for not doing proper checks and allowing the dodgy owners take over clubs.

    • almajir says:

      Tell me how you check to see if someone is “dodgy” if they’ve never been convicted (as Carson hadn’t been in 2009), I’m intrigued.

      • chris says:

        Dan, i sure you remember his 2004 conviction which although not a criminal offence here, it should still have sounded alarm bells to an inept FA & Prem league.
        In 2004, Yeung pleaded guilty in a Hong Kong magistrates’ court to 14 counts of failing to disclose shares he owned in a Stock Exchange-listed company, Cedar Base Electronic Group. Yeung was fined HK$43,000 (£3,300) and ordered to pay the investigation costs incurred by the Hong Kong Securities and Futures Commission, which prosecuted him. Breaches of the SFC’s laws requiring people to disclose shareholdings of 10% or more are criminal offences in Hong Kong, prosecuted in the courts and punishable by a fine or possible prison sentence. From The Guardian.

        • almajir says:

          If it’s not a criminal conviction here, how can it set off alarm bells?

          The rehabilitation of offenders act 1974, (in addition to recent amendments) allow for convictions to become spent after a period of time so that people can become useful parts of society despite past transgressions. If you’re going to say one conviction and that’s it, you’re a criminal for life then that’s hardly fair is it? Some people make mistakes, we have to allow for it – especially if it’s not even considered a criminal conviction here.

          People think a harsher test is the answer, I cannot agree myself. I don’t think it’s possible to test someone’s future intentions – only their past transgressions and that means if someone hasn’t been caught then they walk whereas a reformed person with a blip in their record doesn’t get a second chance that they maybe deserve.

          Force owners to put money aside as a bond to insure against things going Pete Tong. Force owners to actually own a significant part of a club – >30% like in American sports so there is one clearly identifiable owner that can’t hide behind nominee accounts and friendly shareholding blocs – make them actually act like owners; it’s the only way. (which is pretty much what Will and I said in the final chapter of Haircuts and League Cups)

      • Bluesfan says:

        I’m not sure how they do the checks but it’s strange how CY tried to buy other clubs before he got blues but they said no and kept well clear of him. But it makes a mockery of the rule and it should be scrapped if they can’t do proper checks on these people it’s a complete joke.

  • When clubs of similar standing one at near bottom of the prem the other near top of the championship 7 positions lower ,the one in the prem earns £200million the one in the championship earns £20million come on are these the fair play rules of sporting gentlemen or the rules of powerful club owners , buying and selling used to be a way of clubs to stay afloat , buy one season train them up sell at a nice profit a season or two later , now you are penalised on spending to much is this fair ,is it fair the way the television money is shared out when a football fan in the second division can spend more money on watching football on telly than premiere ship fans does and yet his club gets no where near what a premiereship club gets, also young players with great potential used to also be the life’s blood of lower clubs attendance wise and sale wise ,now top clubs pimp them away before
    they are old enough to sign a contract .is this fair , who really is running the football league .

  • chris says:

    So it looks like QPR have got away with spending far in excess of FFP the season before last then?
    So nothing to stop them and Hull doing that this season too?
    The game is a farce and all the FA, Football League & UEFA and our useless politicians can do is go on about FIFA corruption while ignoring their own incompetence in running the game and not sticking to their own rules.
    Systemic corruption is corruption which is primarily due to the weaknesses of an organization or process.
    Who does that make you think of?

  • oldburyblue says:

    Why the surprise? George Orwell was smack on when he wrote “All animals are equal…..but some animals are more equal than others”. Power and money corrupts, be it politics or sport.

  • swissjonny says:

    Power corrupts and absolute power corrupts absolutely.I really cant see how football debts can be preferred in this manner.Surely the laws of the land apply to football as well.Our great game is in total crisis and needs a complete clear out.FIFA is rotten to the core,EUEFA appears to have huge issues and the arrogance of the premier league is becoming unbearable.The older I get the more cynical I become but frankly Plattini used to have lunch in Crans-Switzerland-with Blatter.Birds of a feather fly together? If this petulant Frenchman gets the nod to lead the sport out of this hole then it will be more of the same.Get rid of both FIFA and EUEFA lets have one governing body with people on reasonable salaries .The election system is always going to be open to bribes and sweeteners so this needs to be totaly overhauled and justice for those who transgress must be fair,swift and harsh.

    • StaffsBlue says:

      Well put. Totally agree. Scrap FIFA and UEFA. One body is the way to go… then they can be held accountable. At the moment, I wouldn’t trust Platini any more than I would Blatter.

  • Mitchell says:

    Power and corruption is without doubt an ongoing facet of daily life. Football is however what we talk about on this OP site. Whatever rules,punishment, sanctions etc is dealt with by FA,FIFA or any related football body is always of a SELECTED nature.Take recent years when Clubs like Sheff. United suffered by undeserved relegation due a WHU player scoring against MU. who was eligible to have played. No points or fine there. If it were Rotherham or similar there is an immediate punishment. I could go on and on but we all get my point. What totally baffles me is why for the last 3/4 years no footballing authority has not recognised the plight of BCFC. Ownership by a so called ‘fit and proper person’ etc. yet other clubs like Leeds have been treated very strongly indeed. Justice like player loyalty in our game today is not to be relied upon and therefore the strength of the collateral and legal teams of the wealthy clubs will always prosper and never be dented. Portsmouth,Southampton,Rotherham and Coventry are the easy boys to whip.

  • Strettonbluenose says:

    It all seems like a step in the right direction, except keeping the football creditors rule.
    Firstly, I’m not 100% sure on this but I thought that employees were top of the list of debtors for all administration, not because of the football creditor rule. I thought the rule was to pay debts to other clubs.
    Secondly, attitudes to changing to paying tax. It’s now starting to be considered immoral to avoid tax. If you think that more tax goes on the NHS than anything else, then when Portsmouth went into administration, the football creditor rule ensured that Spurs were paid at the expense of the sick of Hampshire.
    Thirdly, if football clubs had to do a credit check before they traded with another club – like my employer does with everyone we trade with – then there would be less transfers done that were not properly financed.
    It’s an immoral rule that’s bad for football and should be scrapped.

Leave a Reply

Personalised Gifts for a Bluenose
Haircuts and League Cups
Open Tax Services
Corporate Solutions UK
PJ Planning
Rodal Heating