Is Administration A Bad Thing?

[Harpers So Solid Crew]

(*) qv not letting Exeter off a relatively small sum- it wasn't the money that was important to him, it was the fundamental belief SJM has that *all* debts should be paid in full.

Wasn't there a time when we tried not to pay York an installmen that was due for Murty?

[Ian Royal]

(*) qv not letting Exeter off a relatively small sum- it wasn't the money that was important to him, it was the fundamental belief SJM has that *all* debts should be paid in full.

Wasn't there a time when we tried not to pay York an installmen that was due for Murty?

We disagreed it was due, because Murts original contract had since been renegotiated a couple of times.

It was pretty dubious. And I think we did pay it in the end.

[RoyalBlue]

(*) qv not letting Exeter off a relatively small sum- it wasn't the money that was important to him, it was the fundamental belief SJM has that *all* debts should be paid in full.

Wasn't there a time when we tried not to pay York an installmen that was due for Murty?

We disagreed it was due, because Murts original contract had since been renegotiated a couple of times.

It was pretty dubious. And I think we did pay it in the end.

I think we were rightly left with no option but to pay it in the end. To have argued otherwise was, to my mind, very sharp/dubious practice and would suggest that when it came to debts owed to us they should be paid in full but a different interpretation would apply when it came to money we owed.

Likewise, on the basis of what we heard re Salako's contractual arrangements, whilst what happened may have been in the letter of those arrangements, some might have questioned whether it was within the spirit with which those arrangements had initially been agreed.

[paultheroyal]

Around the time we were promoted he was valued at about £325m by the Times Rich list irrc. I think he's now valued at around £200m, again iirc. So he seems to have lost at least a third of his fortune... and bear in mind he's owed about £20m by us and then the club will be considered as one of his assets in valuing his wealth, so we've got to equate to something not far off 25% of his wealth.


It's not hard to see why he is struggling and not putting money into us if a football club which is running at an annual deficit without player sales is that much of his wealth and some of his other businesses are doing as bad, if not worse.

Might be valued at 200m but that's wrapped up in property and business. As far as disposable income, he ain't got much!

[grey_squirrel]

He is not owed £20M by us.

He invested in a PLC.

Oh poor Madejski. down to his last couple of million in loose change! What do you want us to do, have a whip round?!

And if he is really struggling then that should be reason enough to get out and sell to someone who isn't a only a £200M worth poorper.

Oh, but then again he trying to sell us, the PLC, isn't he?! Just takes a litle longer than a decade to do so for a well run club doesn't it?!

[Svlad Cjelli]

What do you want us to do, have a whip round?!

No just listening and understanding would be sufficient.

[Simon's Church]

Lol. As if anyone listens to or understands anything on here.

[Svlad Cjelli]

A man can dream, can't he?

[working class hero]

Administration clearly holds few fears for all the clubs which are massively in debt. If the banks were to call in all loans to Clubs the PL would implode beautifully and we would see clubs like MUFC in the mire.... except of course that most clubs would be in the same situation so the status quo would maintain.

For smaller clubs like Plymouth it may prove to have been a death knell - their putative buyers are reputed to only want to buy so they can demolish Home Park and develop the land. For us it would probably mean relegation and a spell in the bottom 2 divisions. This would be fine by me and far preferable to being ripped off in the PL. However, we might go out of business as I suspect the cost of running the new ground is substantially higher than that of running Elm Park.

So, some pluses [a few seasons of big signings and glory] and some negatives [going down the tubes].

But as mentioned by others local non-league clubs such as Reading Town provide lively entertainment at minimal cost. And lively entertainment was certainly not evident at Hull even though prices were rather inflated!

[glenroyal]

In my opinion, Administration is a disaster; its not just the 10 point deduction (which would probably mean relegation), but the fact that we would have cheated. If others want to behave that way, let them get on with it, but buying players with money you don't have and can't pay back is financial doping and I'd rather my club didn't indulge in it thank you very much.

Gambling on making your business successful by incurring debt and possibly facing the risk of administration is not illegal, it's not immoral nor is it cheating. I suspect many very successful business men have done that at some stage as they sought to establish/grow their empires. And how many people have taken the risk of a bigger mortgage than perhaps was sensible.

It only becomes illegal/immoral/cheating if you incur that debt with no intention of paying it back or knowing damn well that you won't have the means to do so.

Putting your business into administration in order to get away from the debts isn't illegal either, albeit it might leave a bad taste in the mouths of many and is likely to have numerous innocent victims who suffer as a consequence. For that blame the politicians/legislators and in the case of football the game's administrators.
...

I almost responded to Mr Angry directly, but this is my point. ie It's not having a credible plan B which is immoral. Gambling and risking administration is part of life ... but gambling in the knowledge that if it fails administration is the only option ... that does need punishment of the right weight in the right place. (The immoral but not technically illegal angle is at the core of so many "consumer protection" programmes exposing scams over the last several decades - nothing to do with football, just regulation of trading .... as you say.)

ie as Svlad says under current regulations administration is clearly not bad enough.

[Rev Algenon Stickleback H]

ie as Svlad says under current regulations administration is clearly not bad enough.

The contrastingly severe punishments in non-league football, where many clubs also overspend horribly, pretty much shows that punishments themselves offer little deterrent.

You really need to bring something in that stops clubs getting into a mess in the first place.

[under the tin]

The thing is, though, is that even these small clubs aren't overspending by installing gold plated ivory goalposts, or covering the terraces with 40 quid a square metre Wilton carpet.
The money's all going on player wages. There is no way that imposing a kind of wage cap will work, because it won't get past the legislation handed down by Brussells. I suspect the PFA could afford to hire some very tasty advocates to take to court.
In any event, all the time that there are those employers who are prepared to pay over the odds, then it remains a busted flush.
The footballers have attained a certain earning level, and they will not give that up lightly.
I don't share Svlad's optimism that regulation will win out.
In my view, it's going to take something seismic to force change. The penny will drop for the pro footballers when when they can see hordes of fellow pro's signing on the dole, as a direct consequence of the destruction of their own industry by their own hand.

[Duke the Dog]

Administration itself isn't a bad thing as it allows the entity to have a future in one form or another. The problem comes if the administrator cannot make the entity a going concern or if no one comes along to pick up the debts.

So far no one has fallen into liquidation in recent years (in the professional league at least) and there is always some mug prepared to spend all their money (or someone elses!) on the club. Whilst this still happens, players will take their wages at the levels they're offered and transfers will be demanded at the levels they are.

Until a big club actually goes bust and disappears (a la Newport or Aldershot - who both resurrected themselves to one degree or another) completely, nothing will change.

But I guess if clubs keep going into administration and not paying suppliers and coming out the other side all smelling of roses they will find it hard to get suppliers who want to work with them (or banks to lend them money etc). This may force clubs into spending responsibly, but I doubt it.

[Snowball]

Newport may have been re-born but it was in The Hellenic League (1989)
and it has taken 22 years to get as high as mid-table in the conference,
still a long, long way from being a league side again...

[roadrunner]

Newport may have been re-born but it was in The Hellenic League (1989)
and it has taken 22 years to get as high as mid-table in the conference,
still a long, long way from being a league side again...

One season away.

[RoyalBlue]

Administration itself isn't a bad thing as it allows the entity to have a future in one form or another. The problem comes if the administrator cannot make the entity a going concern or if no one comes along to pick up the debts.

So far no one has fallen into liquidation in recent years (in the professional league at least) and there is always some mug prepared to spend all their money (or someone elses!) on the club. Whilst this still happens, players will take their wages at the levels they're offered and transfers will be demanded at the levels they are.

Until a big club actually goes bust and disappears (a la Newport or Aldershot - who both resurrected themselves to one degree or another) completely, nothing will change.

But I guess if clubs keep going into administration and not paying suppliers and coming out the other side all smelling of roses they will find it hard to get suppliers who want to work with them (or banks to lend them money etc). This may force clubs into spending responsibly, but I doubt it.

You spoilt your post by referring to Aldershot as a 'big club'!