The Scottish Football League yesterday flexed its muscles and hit Dundee with a 25 point penalty for going into administration last month. As noted in previous articles, the SFL does not have set penalties for such offences, instead retaining complete discretion to deal with each situation as it sees fit. And in Dundee’s case they saw fit to be severe, imposing not just the points deduction but a transfer embargo and a promise to give the situation further consideration should they still be in administration by March 31st.
I’ll come to the whys and wherefores of this in a moment, but firstly it’s worth reading the SFL’s statement on it and the reasoning for it.
WE ARE OF THE OPINION THAT LESSONS ARE NOT BEING LEARNED. FOR EXAMPLE, CLUBS HAVE TO REALISE THAT, GOING FORWARD, THEY CANNOT TREAT THEIR HMRC OBLIGATIONS AS SOMETHING AKIN TO A CREDIT CARD.
Notwithstanding the abuse of the Caps Lock key, this is terrific stuff. It’s the kind of thing you might have read many times on twohundredpercent, but to read it coming from football administrators is tremendous, and shows at least some sign of them starting to tackle issues that have been ignored for too long. Because it’s not just talk, they’ve started the process of taking positive action too:
FOLLOWING A RECENT MANDATE FROM OUR CLUBS, THE SFL WILL NOW PREPARE THE INTRODUCTION OF AN EARLY WARNING SYSTEM, DESIGNED TO ALLOW US TO INTERVENE AT ANY STAGE, IF ADVISED BY HMRC THAT CLUBS ARE DEFAULTING ON THEIR OBLIGATIONS.
Really excellent news – it’s exactly what this blog (and many other places, naturally) had been calling for. It’s very far from foolproof of course, and is not in itself going to prevent clubs getting into difficulty, but it goes some way – tax arrears are a reasonably good early indicator of problems, and the Dundee situation would not have happened like this had such a rule been in force last year.
So whatever the specific merits or demerits of the sanctions imposed on Dundee, I’m heartened that it’s been done for the right reasons and with a real sense of purpose. In the long run that’s the most important part of today’s statement. HMRC themselves have already given it their backing, and if they see that the football authorities are playing their part then we might even find them being a bit more helpful and cooperative in future.
And so to Dundee. 25 points is stiff. I’m a little bit torn because I do have genuine affection for the club, and while I still think and hope they’ll be saved they’re not safe yet and there is a danger that this could tip the balance against them.
But I also know that that isn’t and can’t be a prime consideration. It’s nobody’s fault but Dundee’s that they’re in such peril and the SFL can’t be swayed against taking the necessary action as a result. And though the punishment is severe there were particular reasons why such severity was warranted in this instance – and why, I think, the SFL are right to have flexible rules rather than a fixed penalty. These reasons have been covered in more detail in earlier articles, but in brief:
- It’s a second administration in eight years, and to my mind it makes no odds that the previous one occurred under SPL, rather than SFL, auspices.
- As administrations go this has been a particularly negligent one, as Dundee have been splashing the cash and comfortably outspending the teams around them while failing to pay the tax bill.
- Livingston’s double demotion last season wasn’t a direct precedent as it happened during the close season but it did strengthen the feeling that consistency required something similarly harsh.
- Finally, with money so short, the decision to retain a number of the better-paid players when making redundancies the other week looked like a further gamble, of a sort that I think the SFL would be right to discourage.
This last point is a very dodgy one and I‘d be interested to know whether it formed part of their thinking or not. If Jackson was indeed taking a gamble here in the hope of staying up and / or attracting an outside investor then it has now probably backfired on both counts. That may partly explain his belligerent reaction to the news, and Harry MacLean’s (the Chief Executive). But I’ve no doubt they are also quite genuine in thinking that the punishment is simply too strong, and they are certain to appeal it, though I don’t expect anything to come of the talk of legal challenges.
Jackson was at pains to play up the danger in which this leaves the club. He might be right, but of course it’s his job to exaggerate the worst case scenarios if it’ll help him argue a better deal for Dundee. Like his comment of having only four weeks to survive when he took over, I’m taking his worst comments with a pinch of salt. We already had some evidence, however, from the Livingston situation last summer, that the SFL would not be browbeaten into imposing lower sanctions because of threats of doom, and once again they’ve stuck to their guns.
We’ll just have to wait and see what effect it has on the club’s future. It more or less guarantees relegation to Division Two (barring any league reconstructions, which is not entirely impossible) and it may indeed mean that any outsiders who might have been thinking of getting involved are less likely to do so. I’m hoping, when we look back in a couple of years time, that they’ll have been able to turn it to positive account. Such evidence as I’ve seen so far from Dundee fans suggest they’ve reacted with considerable anger, and just maybe a backs-to-the-wall mentality will help people to rally to the cause. The Trust has so far raised around £90K – impressive but well short of the estimated half million that will be needed to keep the club going to the end of the season. Another chunk of that may come from the sale of Leigh Griffiths in January, but I suspect they’ll also need to get local businesses on board, and may end up combining forces with former owner Peter Marr – despite his part in the club’s first administration in 2003.
The other name still hovering around is Gio di Stefano, the “lawyer” and convicted fraudster who was also involved in the club in 2003. If yesterday’s sanctions serve to discourage his involvement then again, it may not turn out to have been a bad thing.
All of that is ifs and buts. I’m looking on the bright side but obviously it can’t be denied that this punishment leaves Dundee in serious difficulties. It’s harsh, but on balance I think fair.
Update: The Supporters Trust, Dee4Life, have released their response. Unfortunately, it’s awful and blames everyone but themselves. Opening sentence – “Dundee fans are furious at today’s attempted murder of our football club by the Scottish Football League.”
Updated again: I was almost too stunned when I added that last link this morning to register just how appalled I am with that Dee4Life statement. It contains this sentence. which I had to read through two or three times to be sure that I’d understood it right:
And why do they address borrowing from HMRC, but not borrowing from banks or directors?
I’m at a loss to know what to say to that, they really do seem to be equating borrowing from people who do actually lend money sometimes to “borrowing” by failing to pay tax bills on time. If they’re trying to prove The SFL’s point for them in the first quote at the top of the article then they’re going the right way about it. I still hope the Trust will ultimately take over the club, but it’s to be hoped they have people ready to take the helm who have a better grasp of the issues than whoever is responsible for that statement last night.