Football Management

Commentary on the management of over 160 English football clubs by Dr John Beech, winner of the FSF Writer of the Year Award 2009/10 Twitter: @JohnBeech Curator of Scoop.it! Football Finance

Southampton

Posted by John Beech on April 1, 2009

The problems facing the Saints because of their parent company, Southampton Leisure Holdings, going into Administration, had been brewing for some time now.

The club’s income has been badly hit by relegation from the Premier League:

  • 2003 – £48.8m
  • 2004 – £49.8m
  • 2005 – £44.8m
  • 2006 – £25.7m (including parachute payment of £6.7m)
  • 2007 – £23.3m (including parachute payment of £6.7m)
  • 2008 – £14.9m (1)

Returning Chairman Rupert Lowe had been unable to pay off the debts incurred mainly in building the club’s new stadium, and these had risen to £27.5m for the year ended June 30 2008 (2). Barclays had become concerned over the club’s overdraft of £4m (3).

Will they have 10 points deducted? That remains to be seen. Football League Regulation 12.3.1b states that the ten points will be deducted in cases where a club (my emphasis) “have an administration order made in respect of that Club”. In this case, the club itself hasn’t – it’s the parent company that has gone into Administration. If they decide they cannot impose a 10 points deduction because of this, we can expect to see the loophole closed shortly, albeit to late to apply it to Southampton.

Extending the catchment of the Regulations to parent companies may prove problematic. For example, in 1992 Birmingham City was brought down by the collapse of the BCCI bank, also owned by the Kumar brothers. Few would argue that the club should, in similar circumstances, be penalised with a points deduction. Deliberate structuring of companies to avoid points deductions is another matter however.

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2 Responses to “Southampton”

  1. […] needs to ensure that in a repeat of the Birmingham City case of 1992 (see my earlier posting ‘Southampton‘), a club is not unjustly penalised for matters that had nothing directly to do with the […]

  2. […] of the new stadium coupled with relegation force the holding company into Administration. (4 and subsequent blog […]

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