SAINTS will not find out today if they will be docked 10 points.
The Football League has issued a statement saying that they are asking legal advisers to compile a report into the state of the club's finances, "as a matter of urgency".
The League had been expected to make a decision today, so the club would know if it was to face a 10 point penalty for parent company Southampton Leisure Holdings PLC going into administration last week.
The statement read: "The Football League Board today considered the position of Southampton Football Club.
The League Board has instructed its legal advisors to commission an independent forensic accountancy report in order to clarify the legal and financial position of the club, as a matter of urgency.
The Board will reconvene once that report is available."
A precedent was set in 2003 when Derby County's holding company went into receivership - which is the same as administration - and the club were not penalised with sporting sanctions.
The club has indicated that they will appeal any ruling which sees the club penalised.
A precedent was set in 2003 when Derby County's holding company went into receivership - which is the same as administration - and the club were not penalised with sporting sanctions.
i knew i swa it that derby set the precidant no punishment will be fall them
A good piece, common sense and yet sadly I'm left with the feeling that the "forensic" accounting team is there to get th FL off the hook. They will conclude that Southampton FC is a different legal entity and just because a holding company has gone bust it's not the same.
I remember recently when West Ham's Iclelandic owners were (and presumably still are) in financial trouble, it was specifically pointed out that the Premier League had already accepted that even if the holding/owning company went bust, West Ham FC would be safe and not itself in jeopardy of having points docked.
Agree with Bing. There will be no points deducted this season or next.
The report can only conclude that the holding company is a different legal entity from the FC (because under company law it undeniably is). The FL has no legal authority to penalise the football club for the financial position of an entirely different company and would lose in a court of law, with heavy costs awarded in Southampton's favour.
I'm not sure why anybody ever expected anything different.
A precedent is born. The problem is that a holding company going bust with no points deduction means that there'll now be a rush to place football clubs in holding companies. The owners can now put the holding company into receivership with no points deduction.
[cite]Posted By: BlackForestReds[/cite]A precedent is born. The problem is that a holding company going bust with no points deduction means that there'll now be a rush to place football clubs in holding companies. The owners can now put the holding company into receivership with no points deduction.
The situation is very confused which is most likely what Rupert Lowe and Soton wanted.
The administrators are reported to be saying the Football Club are close to going out of business and may not fulfil their fixtures.
Yet the football club is not in administration.
GHE reported that a Soton Director stated that the FC could also go into administration.
Soton are begging fans to donate money to keep the club going.
Yet if the £30m debt is wiped they might be in a better position. Then again they might just not have any operating capital to keep the club going and be subject to a winding up order from HMR&C or someone else.
The Football League were very tough with Leeds and Luton and face uproar from them and others if they allow Soton off the hook but Soton will argue they have done nothing wrong.
All FL clubs have a "golden share" in the football league which is, in effect, their membership of the League. This is obviously very valuable. But the FL won't allow this to be transferred to another entity (Soton 2009) unless they feel that they have come out of Administration in the right way. Leeds tried this but came unstuck and got the bigger than 10 points penalty. My guess, and it is just that, is how the League will get at Soton.
They will then pass a new rule about holding companies although it seems Derby did something similar a few year back.
Premiership have different rules (different "club") and I don't think they have a 10 point deduction rule. Maybe they never expect any of their members to get into financial trouble or maybe the Prem owners just won't allow it.
Oh, for the jumpers for goalposts days when you didn't need a degree in Business Law to follow football.
One thing you can be certain of is that the Football League will be looking for any excuse not to have to make a decision. If this does turn out to be another loophole then they better take a serious look at the regulations and make them watertight because there will be lots more clubs entering administration over the coming seasons.
"It has also been argued that a precedent was set by Derby County, who were not deducted 10 points when their parent company went into administration in 2003. But the 10-point rule did not come into effect until the 2004-05 season, so that route is also closed."
I think that's a very relevant point he raises in the blog. Since this time a number of clubs (Leeds, Bournemouth, Doncaster, Luton, etc, etc) have all suffered from application of the rule. Of that lot maybe only Leeds have the clout to mount a legal challenge on their own but I'd expect the others to be very interested in taking part in a group action for damages if the rule is not applied consistantly. It's possible Luton may never get back in league because of a decision taken by this lot.
I don't want to see any club go under but, once again, a little part of what makes it the game I love dies every time the FA/League, etc chop and change their decision depending on who's on the end of it.
Isn't it about time the nations favourite sport got the admistrators it deserves???
to my mind with this the FA are taking the same gamble the premier league did with west ham.
The delay will be in the hope that southampton are pretty much relegated by the time they need to make a decision at which point what they say makes a lot less difference. If they go on a storming run and look like surviving then they will be under masses more pressure from all sides to do something about the situation.
I am sure that the fa would prefer to do nothing and let 'nature take its course' to avoid any legal threats.
Personally i am against points deductions except in cases of severe mis-management. This may be one of those cases or it may just be fourther evidence of the difficulties clubs that have spent time in the top flight face adjusting to life in the championship.
Oh, for the jumpers for goalposts days when you didn't need a degree in Business Law to follow football.
Interesting analysis Henry. To me what it all points to is the FL giving itself the strongest position it can for when a decision is made, whichever side they come down on. I can't help thinking that they will wriggle out of the ten points now given the way the ownership is structured, but as you say, get them when/ if the club is refinanced/taken over. I have posed a question to Bryan Matthews over on the pink oboe list as to why the football club remains out of administration when it owes a shed load to it's creditors. It seems to me very moot that the club is defacto in administration as it is being run by the Administrator, as far as I can tell.
My Dad was an accountant and he was involved with insolvency issues from time to time. It would have been nice for his view.
Not sure it is a case of the FL wriggling out of imposing a ten point deduction, Bing. I suspect it's more a case of their lawyers telling them they won't get away with it in a court of law, unless the football club also goes into administration.
Henry Irving quotes GHE quoting a Soton director (sorry for the convoluted attribution) saying that the FC could also go into administration. If and when it does, the League will hang them out to dry. Until then, my reading of the situation is that the FL is in a legal bind. They may be able to change the rules for future cases to close the loophole. But even then, it's going to be legally difficult for them to find a way of taking punitive action against a company that isn't in administraton, even if its parent company is.
[cite]Posted By: nigel w[/cite]Not sure it is a case of the FL wriggling out of imposing a ten point deduction, Bing.[/div]
Yes it was a poor choice of words. What I meant was they desperately don't want a legal battle over it, either by the Club/the Administrator or by those clubs who may be relegated instead of Southampton. The forensic analysis will enable them, presumably, to claim that they have fully investigated at the technical position is that the club is not in Administration thus the ten point deduction will not apply.
Leeds and others may kick up but they have no legal grounds to challenge this decision, although they may of course seek to challenge the ones that dealt them large deductions.
Yes, the FL must be desperately hoping that Soton don't put a run together that keeps them up at, say, the expense of Norwich or Forest. If they do, there is going to be the most almighty rumpus over the non-imposition of that ten point deduction !
If Southampton dont get deducted 10 points then the whole thing is ridiculous, penalise the likes of Luton & Leeds willy nilly but not Southampton because of a 'loop hole', craxy....then again if Southampton do get deducted 10 points the whole thing is ridiculous, penalise Southampton for their parent company going into administration and do nothing to West Ham for exactly the same...the blokes that run football in this country are an absolute disgrace...when I see people talking about the mis management of our club I look at the people that run the game and thinkg thank f*** we haven't got that bunch of tits.
Comments
Well stand up you lazy fecker!!!!
The Football League has issued a statement saying that they are asking legal advisers to compile a report into the state of the club's finances, "as a matter of urgency".
The League had been expected to make a decision today, so the club would know if it was to face a 10 point penalty for parent company Southampton Leisure Holdings PLC going into administration last week.
The statement read: "The Football League Board today considered the position of Southampton Football Club.
The League Board has instructed its legal advisors to commission an independent forensic accountancy report in order to clarify the legal and financial position of the club, as a matter of urgency.
The Board will reconvene once that report is available."
A precedent was set in 2003 when Derby County's holding company went into receivership - which is the same as administration - and the club were not penalised with sporting sanctions.
The club has indicated that they will appeal any ruling which sees the club penalised.
i knew i swa it that derby set the precidant no punishment will be fall them
http://blogs.telegraph.co.uk/samgreen/blog/2009/04/07/football_league_must_deduct_10_points_from_southampton
I remember recently when West Ham's Iclelandic owners were (and presumably still are) in financial trouble, it was specifically pointed out that the Premier League had already accepted that even if the holding/owning company went bust, West Ham FC would be safe and not itself in jeopardy of having points docked.
I can feel a cop out coming on.
The report can only conclude that the holding company is a different legal entity from the FC (because under company law it undeniably is). The FL has no legal authority to penalise the football club for the financial position of an entirely different company and would lose in a court of law, with heavy costs awarded in Southampton's favour.
I'm not sure why anybody ever expected anything different.
Are we not two separate companies?
The administrators are reported to be saying the Football Club are close to going out of business and may not fulfil their fixtures.
Yet the football club is not in administration.
GHE reported that a Soton Director stated that the FC could also go into administration.
Soton are begging fans to donate money to keep the club going.
Yet if the £30m debt is wiped they might be in a better position. Then again they might just not have any operating capital to keep the club going and be subject to a winding up order from HMR&C or someone else.
The Football League were very tough with Leeds and Luton and face uproar from them and others if they allow Soton off the hook but Soton will argue they have done nothing wrong.
All FL clubs have a "golden share" in the football league which is, in effect, their membership of the League. This is obviously very valuable. But the FL won't allow this to be transferred to another entity (Soton 2009) unless they feel that they have come out of Administration in the right way. Leeds tried this but came unstuck and got the bigger than 10 points penalty. My guess, and it is just that, is how the League will get at Soton.
They will then pass a new rule about holding companies although it seems Derby did something similar a few year back.
Premiership have different rules (different "club") and I don't think they have a 10 point deduction rule. Maybe they never expect any of their members to get into financial trouble or maybe the Prem owners just won't allow it.
Oh, for the jumpers for goalposts days when you didn't need a degree in Business Law to follow football.
I think that's a very relevant point he raises in the blog. Since this time a number of clubs (Leeds, Bournemouth, Doncaster, Luton, etc, etc) have all suffered from application of the rule. Of that lot maybe only Leeds have the clout to mount a legal challenge on their own but I'd expect the others to be very interested in taking part in a group action for damages if the rule is not applied consistantly. It's possible Luton may never get back in league because of a decision taken by this lot.
I don't want to see any club go under but, once again, a little part of what makes it the game I love dies every time the FA/League, etc chop and change their decision depending on who's on the end of it.
Isn't it about time the nations favourite sport got the admistrators it deserves???
The delay will be in the hope that southampton are pretty much relegated by the time they need to make a decision at which point what they say makes a lot less difference. If they go on a storming run and look like surviving then they will be under masses more pressure from all sides to do something about the situation.
I am sure that the fa would prefer to do nothing and let 'nature take its course' to avoid any legal threats.
Personally i am against points deductions except in cases of severe mis-management. This may be one of those cases or it may just be fourther evidence of the difficulties clubs that have spent time in the top flight face adjusting to life in the championship.
Interesting analysis Henry. To me what it all points to is the FL giving itself the strongest position it can for when a decision is made, whichever side they come down on. I can't help thinking that they will wriggle out of the ten points now given the way the ownership is structured, but as you say, get them when/ if the club is refinanced/taken over. I have posed a question to Bryan Matthews over on the pink oboe list as to why the football club remains out of administration when it owes a shed load to it's creditors. It seems to me very moot that the club is defacto in administration as it is being run by the Administrator, as far as I can tell.
My Dad was an accountant and he was involved with insolvency issues from time to time. It would have been nice for his view.
Henry Irving quotes GHE quoting a Soton director (sorry for the convoluted attribution) saying that the FC could also go into administration. If and when it does, the League will hang them out to dry. Until then, my reading of the situation is that the FL is in a legal bind. They may be able to change the rules for future cases to close the loophole. But even then, it's going to be legally difficult for them to find a way of taking punitive action against a company that isn't in administraton, even if its parent company is.
Yes it was a poor choice of words. What I meant was they desperately don't want a legal battle over it, either by the Club/the Administrator or by those clubs who may be relegated instead of Southampton. The forensic analysis will enable them, presumably, to claim that they have fully investigated at the technical position is that the club is not in Administration thus the ten point deduction will not apply.
Leeds and others may kick up but they have no legal grounds to challenge this decision, although they may of course seek to challenge the ones that dealt them large deductions.