VQPR Blog - The Two Faces of Administration
Toboboly explores the current finincial climate in football - indicating that it is less of a level playing field than ever.
With Portsmouth currently being helped by the Premier League to pay of it`s contractual arrears it is unsurprising that a number of fans from a broad spectrum of clubs feel a little miffed and perhaps jealous at what they see as one rule for them (top clubs) and another for us (the rest). In case you are unaware Portsmouth currently owe £7m to three different English clubs and a similar amount to French club Lens. They also owe HMRC a fair amount which has led to a petition being delivered to court to wind the club up and sell of what there is to appease creditors. However the Premier League is paying the three English clubs, at least, with future TV money which greatly reduces Portsmouth`s problems and will perhaps see them avoid entering administration and the subsequent ten point deduction and red faces at Premier League head office.
This treatment is in stark contrast to many other clubs who have felt the wrath of the Football League and the FA over similar 'discrepancies`. For example Rotherham have sold both their stadium and training pitch to raise money for creditors and are now playing on a rented pitch owned by Doncaster Rovers. Their reward; a £750,000 bond demanded by the Football League so that the club returns to Rotherham in the next four years. Rotherham were also forced to accept a 17 point deduction prior to the 08/09 season as they had not left administration at the start of the season and the same punishment was given to AFC Bournemouth.
Bournemouth have struggled for years, partly due to a ban on games being held on a bank holiday which goes back to the early nineties and was only rescinded in 2003. This was due to trouble at a game involving Leeds United despite many of the visiting fans being to blame. Bank holidays are normally a good day for attendances and this ruling has put the club on the back foot compared to many of its peers. However when the club entered administration the Football League also decided to put a transfer embargo on the club which restricts the ability on the club to bring in new talent. This was, according to the Football League, because creditors were not paid and compensation packages agreed to departing managers not honoured as well as money owed to HMRC and has currently been in effect for two seasons. Sound similar to another South coast team?
Another club to struggle recently and more publicly is Luton Town. Given a whopping 30 point penalty the club unsurprisingly failed in their bid last season to avoid relegation to the Conference. The large point`s deduction was mainly down to directors of the club going behind the managers back and paying agents through a holding company. However the Football League only found out about it due to staff at Luton who brought it to their attention, despite this no leniency was forthcoming and the club stood no chance of a way back. This is in marked contrast to West Ham United who escaped a points deduction which would have seen them relegated from the Premiership for fielding Carlos Tevez who was under third party ownership and who West Ham were complicit in hiding the truth about.
With the collapse of ITV Digital in 2002 it is not surprising that many lower league clubs have found it hard to survive. The money promised by ITV never arrived and meant that clubs who had budgeted for it to survive were left with little choice but to sell off assets such as players, grounds and training facilities. This in turn has meant a slow death for some and years of slow recovery for others. However none of these clubs have been offered a helping hand from the leagues they compete in or represent with fans bearing the burden to stop their club from ceasing to exist. Clubs such as Wrexham, Stockport, Darlington, Chesterfield, Kingstonian, QPR, Oldham and Leeds have all survived administration but none have been the better for it. Many other clubs such as Accrington Stanley, Cardiff, Watford, Crystal Palace and Coventry are barely scraping by as well as numerous others who have all had to sort their own finances out the best ways they can.
Not all clubs are run poorly but it is generally the ones who overstretch or who have corrupt owners who find themselves singled out for the Football Leagues unique brand of justice, a sporting purgatory which can see the accused sink more often than swim. The rules for entering administration were tightened in the early Millennium in order to see parity between football clubs of all levels. It seems a shame that this parity differs once the Championship stops and the Premiership begins.
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