Generic clubs in financial crisis Thread

[Ian Royal]

surely the PL simply can't have that money just floating around to give. If it's advances, it just means they're staving off the inevitable, which surely can't be acceptable to the court or HMRC?

[Pseud O'Nym]

What we don't know is the cost to the PL, if Pompey go under, in terms of breech of contract with the broadcasters. Apart from the loss of TV money from nine matches, including games against Chelsea, Spurs and Villa, it's not unreasonable to assume some compensation would be due.

[Sun Tzu]

Are the FL under any obligation to actually accept Pompey ?

Could they look at the club, decide they were not viable and simply refuse to accept them into the league ?

[Dirk Gently]

Are the FL under any obligation to actually accept Pompey ?

Could they look at the club, decide they were not viable and simply refuse to accept them into the league ?

Technically no, but bearing in mind the number of basket case clubs they've happily allowed to go to the Conference they'd not dare, politically.

[Sarah Star]

Are there any rules about what your set-up is/financial situation/ etc for joining each league?

[Sun Tzu]

Are the FL under any obligation to actually accept Pompey ?

Could they look at the club, decide they were not viable and simply refuse to accept them into the league ?

Technically no, but bearing in mind the number of basket case clubs they've happily allowed to go to the Conference they'd not dare, politically.

So the only entry requirement for a place in the FL is to be one of the 3 worst teams in the PL (or conversely one of the best in the Conf ?)/ ? Teams have been refused entry into the FL from the Conference in the past for various reasons (ground standards usually) and I believe theoretically could miss promotion to the PL on similar basis. It wouldn't seem wrong for the FL to require any club joining it (whichever route) to meet some basic standards. I appreciate the 'political' nature of the point about clubs dropping to the Conference but again that would be Conference rules, not the FL.

[Mr Angry]

I'm sure that before the start of a season, all clubs have to give assurances that they will fulfill their fixtures; if a club cannot give those assurances, or that the FL have doubts that the club can fulfill their fixtures they can withold entry.

[Mr Angry]

Further to this debate, i have just emailed the following to the Football League:

Hi – I wonder if you can answer the following questions…

Does the Football League have the right to prevent a club from entry for financial reasons?

Are there any regulations pertaining to a requirement to have an assurance by a club that before they enter the Football League that they will be able to fulfil their fixtures for the following season?

If these assurances aren’t given, or the Football League relevant committee feel that fixtures might not be fulfilled, can that club be denied entry into the Football League.

Many thanks.

I will let you know if there is any sort of reply.

[Mr Angry]

Pretty quick response, giving me a link to the relevant publication.

here are some extracts from it;

INSOLVENCY POLICY
A club will not be eligible for membership of The Football League if by the second Saturday in May in the current year it:-
•
Has a manager, administrator, receiver or administrative receiver appointed in respect of that club or any part of its undertaking or assets.
•
Has an administration order made in respect of that club.
•
Has a winding-up order made in respect of that club.
•
Has passed a resolution for the winding-up of that club
•
Has entered into any arrangement with its creditors or some part of them in respect of the payment of its debts or part of them as a Company Voluntary Arrangement under the Insolvency Act 1986 or Scheme of Arrangement under the Companies Act 1985 (and any statutory modification or re-enactment of either of those acts for the time being in force).
•
Has any proceeding or step taken or any court order in any jurisdiction made which as a substantially similar effect to the foregoing.

Reading that, it seems to me that if Pompey are still in administration come May then they aren't eligible for entry into the Football League!!!

Then this section also seems relevant:

16.3
Current HMRC Debt. With effect from 1st July 2009, any Club which has not within 28 (twenty eight) days of the relevant Due Date paid to HMRC the amounts due to be paid to HMRC to discharge:
16.3.1
the Club’s liability for PAYE & NIC due in respect of any and all employees or former employees of the Club for the immediately preceding payment period;
16.3.2
the Club’s full liability for PAYE & NIC which becomes due as a result of an assessment issued by HMRC, subject to clause 16.4 below; and/or
16.3.3
defaults of the terms of any Time to Pay Agreement,
(each a ‘Default Event’) shall report the Default Event to the Executive within 2 working days of the Default Event.
16.4
Arrears of HMRC Debt. Regulation 16.3 shall not apply to any arrears of PAYE & NIC relating to the period prior to 1st July 2009 which have not already been included as part of a Time to Pay Agreement at any time (‘Arrears’). Where any Club has any Arrears as at July 2009, that Club shall:-
16.4.1
provide to the Executive by not later than 1st July 2009 full details of the Arrears, together with the periods to which they relate; and
16.4.2
subject to the provisions of Regulation 16.6, not later than 1st July 2010 conclude a Time to Pay Agreement and lodge details of the same with the Executive.
16.5
Any Club which has not, subject to the provisions of Regulation 16.6, concluded and lodged a Time to Pay agreement by 1st July 2010 shall be deemed to be subject to a Default Event and the provisions of Regulation 16.9 shall apply.
16.6
A Club may apply to the Board for an extension of time to conclude a Time to Pay agreement. The Board shall have absolute discretion as to whether to refuse or approve an application, and if the Board chooses to approve an application it may impose such conditions as it determines. The Board may subsequently withdraw any approval or in the alternative amend or withdraw any of the conditions and impose new conditions at any time.
16.7
For the avoidance of doubt, where a Club defaults on the terms of a Time to Pay Agreement as described in Regulation 16.3.3 entered into prior to 1st July 2009, and such default results in all outstanding amounts becoming due to HMRC immediately, the provisions of Regulation 16.4 (which provides the Club with a time period in which to agree a Time to Pay Agreement) shall not apply, and the Club shall remain subject to a Default Event until such time as the outstanding amounts are paid.
16.8
Reporting Default Events. When a Club reports a Default Event to the Executive it shall at the same time provide to the Executive details of any and all amounts due to HMRC from the Club in respect of PAYE & NIC, together with the periods to which they relate.
16.9
Consequences of a Default Event. A Club which is subject to a Default Event shall be subject to a registration embargo such that it shall not be permitted to register any Player with that Club without the prior written consent of the Executive for the period that the Club is subject to a Default Event.
16.10
Failure to Notify a Default Event. A Club which fails to notify a Default Event shall be guilty of misconduct and shall be referred to the Football Disciplinary Commission in accordance with Section 7 of these Regulations.
16.11
Provision of Authority. Each Club shall provide to the Executive, not later than 31st May prior to the commencement of a Season, (and in any event within 7 days of any request for a further authority from the Executive), an original, irrevocable authority (which shall not be time constrained) in the form prescribed by the Executive and signed by a director and the company secretary, addressed to HMRC authorising HMRC to provide to The League information relating to amounts of PAYE & NIC payable, paid and overdue from the Club to HMRC from time to time including by way of example and without limitation, the amount of Arrears (if any), the existence of and current position in respect of any Time to Pay Agreement and if a Club suffers a Default Event (‘Authority’). The League shall be entitled to forward the Authority to HMRC without having to seek the consent of the Club.
16.12
The Board shall have the power to suspend any Club which, not later than 31st May prior to the Commencement of the following Season (including, for the avoidance of doubt, those Clubs entering The League by way of promotion from the Football Conference or relegation from the Premier League for the following Season) or within 7 days of a request, fails to provide to the Executive the Authority in the required form. A suspended Club shall not play in:-
16.12.1
any League Match;
16.12.2
any Football Association Cup Match;
16.12.3
any Football League Cup Match;
16.12.4
any Football League Trophy Match; and/or
16.12.5
any other match conducted or controlled by The League and in which it would otherwise be eligible to compete.
16.13
For the purpose of the League Competition, the Board shall have the power to determine how the cancellation of a League Match caused by the suspension of one of the Clubs, which should have participated in it, shall be treated.
16.14
Disputed Amounts. Any amounts which HMRC claims to be due to it, for example by way of an assessment, but which have been formally contested by the Club shall not be considered as due to HMRC for the purposes of this Regulation 16 until such time as a final determination is made on HMRC’s claim.
16.15
Information provided by a Club and/or HMRC in relation to any Time to Pay Agreement and/or any Arrears shall only be made available to senior members of the Executive and the Independent Chairman (as described in Article 28.9) and shall not be disclosed to the Board generally, provided always that the Executive shall be entitled to report the happening of a Default Event to the Board for the purposes of enforcing Regulation 16.9 (Consequences of a Default Event).

They could in trouble for next season reading these regulations!!

[Stranded]

Doesn't mean they won't let them in but they would be penalised before gaining entry.

[exileinleeds]

Interestingly, the PL had a meeting today- no to play-off for 4th CL place.

"Portsmouth are NOT IN ADMINISTRATION!"

One assumes, that as the appointment of Andrew Andronicus [sic] has been questioned by the court- they are taking no action until the situation is ratified.

Wonder how he removes the splinters from his bum?

[Stranded]

Interestingly, the PL had a meeting today- no to play-off for 4th CL place.

"Portsmouth are NOT IN ADMINISTRATION!"

One assumes, that as the appointment of Andrew Andronicus [sic] has been questioned by the court- they are taking no action until the situation is ratified.

Wonder how he removes the splinters from his bum?

I would guess that legally they aren't in administration currently but in a form of limbo - so bizarrely whilst the options for Pompey seem to be that either it is ratified or they go bust, leagally the PL can't do anything.

Or they are hoping that a white night comes riding in in the next two weeks, buys the thing and makes the nasty matter go away.

[Gav]

Or they are hoping that a white night comes riding in in the next two weeks, buys the thing and makes the nasty matter go away.

Or a Red Knight?

Buy Pompey, move them to Manchester and rename them Newton Heath. Instant league position and free custom built fanbase. Job's a goodun.

[TFF]

Interestingly, the PL had a meeting today- no to play-off for 4th CL place.

"Portsmouth are NOT IN ADMINISTRATION!"

One assumes, that as the appointment of Andrew Andronicus [sic] has been questioned by the court- they are taking no action until the situation is ratified.

Wonder how he removes the splinters from his bum?

I would guess that legally they aren't in administration currently but in a form of limbo - so bizarrely whilst the options for Pompey seem to be that either it is ratified or they go bust, leagally the PL can't do anything.

Or they are hoping that a white night comes riding in in the next two weeks, buys the thing and makes the nasty matter go away.

If the judge rules that the administration was/is legal they'll get docked the points.

If a saviour is found between now and the court date, paying off HMRC and getting them out of "admin", and before the Premier League deduct the points, I can see PFC claiming that they never went into administration proper. Cue massive legal issues with the other struggling clubs trying to get their 9 points deducted.

[The Prisoner]

Quick update on Chester. They are as good as gone (well, Chester City 2004 Ltd is). HMRC will wind them up at a court hearing in London on March 10th. With debts, no assets (players have all left as not paid) and no foreseeable future income (no fixtures!) it is a pretty open and shut case.

City Fans United (Independent fan club) have set the wheels in motion with some meetings in the city and the new club will begin formation as soon as the court date is out of the way. The council own the ground and are as pee'd off as the fans with the mismanagement of the club (and the non payment of rent!)

FC Chester are likely to be elected to the Unibond League 1 (3 below the conference) for 10/11, although several leagues are keen for them to be admitted as 1,000+ are likely to go to home games, with 200+ expected as an away following - this would double + most of the homes gates in these leagues for their visit.

Some great gallows humour at http://www.devachat.com

[Barry the bird boggler]

Nice to see yet another imaginitive name for a reborn club... you'd think it was illegal to have anything else but AFC or FC stuck in front of the name of the town !

[Franchise FC]

Administrator plans to sell Fratton Park to Chaerai for 10m then to rent it back at £1.2m (3% increase per year) He is owed £13m

How that meant to work - he's already loaned them £13m secured on the ground, surely they'd need to sell it to someone else for more than £13m, and give that to Chanrai? The ground can't be worth £23m?

Chanrai loans club £13m

He buys ground from club for £10m

Instead of giving them £10m then taking back part of the loan, they simply reduce the loan to £3m.

Simples.

[Franchise FC]

What would happen to the money if Pompey were liquidated though? This years TV money plus two years parachute payments are due to Pompey after all, albeit not yet. So presumably the PL would have to at least pay the receiver a portion of the money.

This potentially has huge implications as the PL will be well aware.

The court has said they worry there is not enough money (£14m) to keep the club afloat until the end of April. Were the PL to guarantee the money as an advance on next years money, so the court allows them to continue with administration, not be liquidated. Pompey somehow manage to string some wins together- and just avoid relegation...the club relegted in 18th would have a serious claim that would cause even more trouble.

Ah but, the delicious irony if that club is West Ham.

[Barry the bird boggler]

Please please please please.......

[Mr Angry]

Doesn't mean they won't let them in but they would be penalised before gaining entry.

According to the first sentence - "A club won't be eligible for enty into the League if........"

Clearly, the rule was drawn up looking at a Conference team coming up, rather than a Premier League team coming down, but it seems unambiguous to me..