BusinessCorporate FinanceOn the money with Gavin Hinks

On the money with Gavin Hinks

Mark Fry and David Hudson, of Begbies Traynor, have set themselves up with a battle after taking over the administration of Southampton Leisure, the parent company of Southampton Football Club

gavin hinks, editor accountancy age

The case will strike right at the heart of the long running row over whether
financial rules should play a part in the prospects of a team doing its best to
win games.

Fry and Hudson have made it clear they intend to fight the Football League’s
decision to deduct ten points from Southampton when it kicks off next season in
Nationwide League 1, following its relegation from the Championship (that’s the
second division to the third division, in old money).

The deduction comes because the parent company is in administration, not the
club. But a report by Grant Thornton says the links between the two are so
close, that the League decided a deduction was in order. Begbies believes that
opinion won’t wash.

Thing is this will be a difficult game in which to score. The Football
Leagues sets its own rules, the most famous being the ‘super creditor’ rule.
This meant everyone who was classed as a super creditor, players and manager
mainly, got their money, sometimes on the most bizarre and one-sided contracts,
before anyone else.

Successive attempts to overturn that ruling have failed. The League is
hard-headed and protective of its own. It doesn’t tolerate outsiders coming in
to tell it what to do.

That’s why Fry and Hudson are pretty brave to get embroiled in the row over
Southampton – or are they very astute? It will get the fans onside. More
importantly, if they can keep the wolf from the door, there’s a chance of making
more money and satisfying more creditors.

Fry and Hudson – saints for The Saints?

Gavin Hinks is the editor of Accountancy Age

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