Barry Hearn On Administration

Ian

Ian began writing Twohundredpercent in May 2006. He lives in Brighton. He has also written for, amongst others, Pitch Invasion, FC Business Magazine, The Score, When Saturday Comes, Stand Against Modern Football and The Football Supporter. Ian was the first winner of the Socrates Award For Not Being Dead Yet at the 2010 NOPA awards for football bloggers.

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10 Responses

  1. Wyre Forest Red says:

    Definitely from a lay-persons perspective this, probably lots of reasons it couldn’t happen. But if clubs were given “a licence to buy” before each transfer window… and only if documents arrived at the league showing that tax bills and finances were in order, then clubs wouldn’t be allowed to use the tax man as a loan company. Either that, or more complicted, any tax debts would be paid by the leaugue out of TV/ advertising monies, before being sent to a club?

  2. Jertzee says:

    Football in this country will not change for the better.
    As much as we want it to change and for clubs to be run within their means it just will not happen.

    The people who have the power will not vote against themsleves – it’ll be like turkeys voting for Christmas.

    This will go on and on and on and on and on……

    For any notice to be taken a Premiership club ill have to go completely bust, and I mean right out of the league bust.

    Until that happens people will continue to turn a blind eye to it.

    Even if a premiership side did go bust there is no guarantee the others will bring about wholesale changes…..no one wants to rock the gravy boat.

    It stinks…the whole thing

  3. Big Sim says:

    Admin can viewed as cheating, but in the case of Luton Town admin was used as a weapon on several occasions to gain control of the club and the underlying issues were not necessarily purely financial.

    As a Luton Town supporter, and whilst thinking the points deductions suffered over past few seasons amount to cruel and unusual punishment, I think the penalties imposed for administration must always be applied to the club (ie the franchise) and not to the owners. Were that to be the case, there would be nothing to stop the owners of the club entering into a prepack administration, buying the club back using a new company and then claiming the new company has nothing to do with the old one.

    We need a better system.

    What about having the projected cashflows of all clubs audited before the start of the season. If their financial planning involves some owner writing a big cheque then so be it as long as the cheque is cashed and the funds are placed in escrow. If a club cannot make a convincing financial case for fulfilling its obligations for that season then it should not be allowed to proceed.

  4. Michael Wood says:

    Turkeys vote for Christmas all the time. People smoke when they know it will kill them, businesses agree to do one thing that they might see as bad for fear of an alternative that could be worse.

    Most often this is seen in the arena of self-regulation. The video games industry put in a set of controls on itself because they feared what would happen should they end up (and I think they did, certainly in some countries) being subject to a less sympathetic Governmental process.

    Likewise the drinks industry started talking about reducing the flow of cut price alcohol because of the spectre of Governmental intervention.

    Which perhaps is the way that football will agree to a range of measures that would protect English clubs from the owners – for fear that should they not do a broader strike will come from Governmental (be it Brown or Platini) agencies.

  5. Jertzee says:

    Michael, you say “Which perhaps is the way that football will agree to a range of measures that would protect English clubs from the owners – for fear that should they not do a broader strike will come from Governmental (be it Brown or Platini) agencies.
    “.

    It will only be in the matter of self interest and will bend the rules rather than do anything sensible like force themselves to live within their means.

    Lok at Chelsea, they are worried about the regulation due to come in about debt, so what has abramovich done? Diluted the value of existing shares by converting his loans to more shares, thereby eradicating the debt. Brilliant!
    Now if he decides to sell up the new buyer will need millions to be able to afford it. So it will only be bought by another multi billionairre or, worse still, bought by people with no money and load the debt onto the club, i.e. like the Glazers.

    All smoke and mirrirs and with the football authorities and clubs this self regulation will be like painting over the cracks.

  6. Martin says:

    Barry Hearn is right, on this occasion.

    The current sporting penalty for administration is patently no deterrent.

  7. ejh says:

    The thing is, football attracts pretty much the dregs of the business class anyway so what on Earth is the point of expecting any binding moves on self-regulation to come from them?

  8. London Harrier says:

    Apologies if I am being a little thick here, but there are some points about this whole shambles I don’t understand

    a) PFC own several million to HMRC. Surely they still owe this, rather than a potential CVA share? Can HMRC not demand the money or wind them up?
    b) How has administration even been an option in light of a)
    c) Could they not be forced to sell their stadium to service the debt?

    PFC won the FA Cup and got into Europe on the back of unrealistic borrowed finances. I wouldn’t say this is ‘cheating’ if you genuinely beleive you could pay it back, but what it does expose is the slack legislatvie framework which allows clubs to get into this kind of mess, and the refusal of those involved to accept that liquidation is a suitable punishment. You cant have it both ways. If your only means of glory is to borrow beyond your means, then you need to accept that one day people will come calling for their money back, and if this means winding a business up shouild it not be able to satisfy its creditors, then so be it. All this farce demonstrate is the greed is good paradigm actually works. It is also a smack in the eye for clubs who attempt to run their football clubs on a manageable scale.

    I have nothing against Portsmouth FC, but going into administration means very little for a club that was doomed to relegation anyway.

    As a footnote, all winding up would mean is an AFC Portsmouth starting again in the regional non league pyramid, which would give fans an opportunity to have a true say in the running of their club and visit grounds they have never been to before. Unfortunately too many supporters have been brainwashed into beleieving that the raison d’etre for supporting a team is to watch them in the Premiership, and would invariably see a move to the non league game as a reason to quit supporting them.

    They couldn’t be more wrong.

  9. LadyWomble says:

    London Harrier – yes, Pompey are now protected from winding-up by HMRC by dint of going into administration. The whole financing and governance of football is now beyond parody. In chronological perspective, the 10 points deduction for FL clubs going into admin was introduced after Leicester were deemed to have pushed it too far – they were effectively bust but resurrected the club debt-free, having paid mere pence in the pound to their creditors. The authorities at the time thought fining clubs was a waste of time, the only way to make them change their behaviour was points deductions. Wind forward to Leeds’ meltdown and the way Bates brought the club out of admin. All still very murky but, despite his protestations, he obviously believed a further points deduction was worth it.

    Football should be run in a businesslike fashion (spending on operational costs within its realistic means, etc) but no-one can pretend it’s a normal business. If a fan thinks their club charges too much or is rubbish on the pitch, they don’t go and support the competition down the road. Suggestions such as clubs lodging security before the start of each season, having their finances vetted quarterly, etc, are all laudable but how would transgressors be punished? Fines? Points deductions? Just how huge will the FA’s compliance need to be? If the FA, supposedly the game’s supreme governing body, had the balls and fewer vested interests, they would introduce more draconian measures. For example, any club in financial difficulties who doesn’t pay its creditors in full is expelled from all FA-affiliated competitions, i.e. they’re out, finished. The Conference has introduced that rule, not sure if it’s effective from this season or next. Yes, that’s tough on the fans but it might encourage them to question the way their clubs are run. And talking of fans, I’d have fans’ representatives on the FA Board. Off the top of my head, one from Supporters Direct, one from the FSF (yes, I know they have a rep on the FA Council but that’s the old farts, nice day out at Wembley biscuit brigade). Perhaps a third could be one of the 200% people? :-) Sadly, none of this will ever happen.

  1. February 25, 2010

    […] Barry Hearn On Administration “Michel Platini, with all of the elegance that one might expect from a man with such a playing career, describes it as ‘financial doping’. It is, in short, the accumulation of debt to purchase success on the pitch. Some clubs do it as a result of the egos of their chairmen, some do it from the fear of what might happen if they don’t, and some do it in the genuine but misguided belief that somehow everything will be okay if they manage to get the team winning on the pitch. The result, however, is usually the same. The players and the manager leave when things turn sour, there is a desperate rush for new investors and, when these can’t be found, it ends in either administration or a close shave with administration.” (twohundredpercent) […]

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