BusinessBusiness RecoveryExclusive: Full time called for football ‘super creditors’

Exclusive: Full time called for football 'super creditors'

Rules that make football players 'super creditors' of their failing clubs, and guarantees their pay, should be scrapped if teams are to survive the current financial crisis, according to a key adviser to the Football League.

Under current Football League rules, clubs in administration have to pay off football ‘super creditors’ first, which include players, managers, other football clubs, the Professional Footballers’ Association and the League, even before preferential creditors as required by law.

But league adviser Alastair Beveridge, partner at Kroll Buchler Phillips, said the rules are making the renegotiation of expensive player wages – one of the most damaging costs for struggling clubs – virtually impossible.

He said: ‘Clubs are in an incredibly difficult situation. If they want to restructure, they have to pay the football people in full and only then pay other creditors, including the banks. If the Football League were to change you could restructure as a normal business.’

A rule change could allow teams to cut the pay of poorly performing players and the long-term injured rather than continue to pay them at their full contractual rate. Current rules also mean if a player is made redundant a club is obliged to continue paying under the terms of his contract.

Commentators have predicted the redundancy of hundreds of players after the collapse of ITV Digital threw doubt on the financial viability of many clubs.

Any move to change the rules is likely to provoke a storm of protest – not least from players themselves – but Beveridge, part of a team advising the league in its dealing with ITV Digital and its failure to pay £180m in sponsorship, believes it is vital.

Beveridge added: ‘If that rule is changed, clubs can renegotiate with players and cut down costs. The alternative would be that some football clubs fail.’ Beveridge has broad support among insolvency professionals who have dealt with failing clubs.

He added the league had sent out letters to the clubs suggesting they appoint advisers from firms that have previously dealt with football insolvencies.

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