BusinessBusiness RecoveryPenalties could kill off clubs

Penalties could kill off clubs

New penalties set to be imposed on football clubs in administration will kill off troubled lower division clubs, according to financial experts.

Link: Football league adopts new administration rules

The new rules, agreed by the Nationwide League last week, say that clubs going into administration will be docked 10 points unless a panel decides that the procedure was inevitable. The club would then have 18 months to emerge from administration before being kicked out of the League.

But Oldham FC administrator Philip Long was disappointed, saying: ‘If clubs in the lower leagues find they get into administration and then lose 10 points and get relegated, it’s going to be a massive problem.’

Mark Fenoughty, previously finance director of Leicester City and now at Sheffield United, said: ‘The law of the land is making it easier for companies to go into administration, but these rules don’t achieve that. The League should be protecting competition so that clubs don’t go out of business,’ he said. ‘My own experience is that you don’t go into administration to clear your debts. It is a really grim situation and one that is really quite painful.’

Joe McLean, Grant Thornton’s national spokesman for football, said: ‘In the real world clubs do not want to go into administration. If a club is several million pounds in debt, it is unfair to impose a double penalty.’

‘You wonder if there is a legal challenge whether this would be legally valid,’ he added.

Related Articles

Carillion CFO blew whistle over 'sloppy accounting' months before collapse

Business Recovery Carillion CFO blew whistle over 'sloppy accounting' months before collapse

3m Alia Shoaib, Reporter
Toys R Us UK and Maplin enter into administration after failing to secure buyers

Business Recovery Toys R Us UK and Maplin enter into administration after failing to secure buyers

3m Alia Shoaib, Reporter
How to avoid a Carillion collapse

Business Recovery How to avoid a Carillion collapse

4m Russell-Cooke
Carillion collapse: The week so far and industry reaction

Business Recovery Carillion collapse: The week so far and industry reaction

4m Emma Smith, Managing Editor
Kingston Smith & Partners appointed trustees in bankruptcy of ex-Newcastle United footballer

Business Recovery Kingston Smith & Partners appointed trustees in bankruptcy of ex-Newcastle United footballer

4m Emma Smith, Managing Editor
Carillion: PwC appointed as special managers – what happens now?

Business Recovery Carillion: PwC appointed as special managers – what happens now?

4m Emma Smith, Managing Editor
Investment firm acquires Avon Steel Company Limited

Business Recovery Investment firm acquires Avon Steel Company Limited

5m Emma Smith, Managing Editor
Manchester law firm enters into administration

Business Recovery Manchester law firm enters into administration

5m Emma Smith, Managing Editor