Football players face job losses

Business recovery firm Kroll Buchler Phillips, whose partners are advising the League, has proposed the suspension as one among a number of ideas, saying the League must realise there is a financial crisis.

It believes the League should tackle the rule which currently obliges clubs to fulfil players contracts before any other creditors, including banks.

Suspension would allow insolvency practitioners, who have been in operation recently at QPR, Bradford City and Bury, to renegotiate players’ contracts to slash their wages. High wage bills are the greatest burden facing many Nationwide clubs who have faced financial failure since the collapse of ITV Digital and the loss of the company’s sponsorship.

Alistair Beveridge, partner at KBP, told Accountancy Age: ‘Given there is an impasse at the moment and no one seems able to break it, one of the possibilities is that there would be a moratorium period to allow some clubs to get rid of the players they don’t need and can’t afford.’

A suspension of the rule would cast doubt on the future of players across the Football League and would cast a further shadow over those returning to the League after relegation from the Premiership.

Administrators called in to help ailing clubs say that they would find it easier to restructure clubs if the super creditor rule were removed.

KBP believes that Nationwide teams have reached the current crisis not only because of ITV Digital’s failure but also as a result of the economic downturn and a slump in advertising revenue.

A Nationwide spokesman told Accountancy Age last week that the League’s board had decided against outright abolition of the super creditor rule.

He added that clubs could raise cash by selling the broadcasting rights to games.

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