Generic clubs in financial crisis Thread

[Wax Jacket]

Seriously, how is Ridsdale still able to buy clubs?

he doesn't buy them

[Big Foot]

Expect Preston to be heading towards oblivion soon

Preston North End have appointed Peter Ridsdale as their new chairman.

The 59-year-old, formerly with Leeds, Barnsley, Cardiff and Plymouth, replaces the outgoing Maurice Lindsay, who stood down as chairman last week for health reasons.

Full story

"Previously a successful businessman, Ridsdale first entered a football boardroom with home town club Leeds and took over as chairman in 1997."

[Silver Fox]

Seriously, how is Ridsdale still able to buy clubs?

he doesn't buy them

How was Ian supposed to know that?

[Mr Angry]

Interesting snippet on the BBC Sport site; since 1992, football clubs have entered adminstration 53 times in English football, yet since 1963, no German clubs have become insolvent.

The HMRC's QC used a pretty big stick to have a go at the current situation regarding the FCR; it would appear that the FCR as applied by the Football League is "inconsistent with EU law" because it discriminates against foreign clubs which are not considered preferred creditors.

Ouch!!!

[Ian Royal]

Seriously, how is Ridsdale still able to buy clubs?

he doesn't buy them

How was Ian supposed to know that?

oops. Must read more carefully and remember chairman does not necessarily equal owner.

[Rev Algenon Stickleback H]

One big difference is that normal companies don't just carry on like before, mainly because the objective of a normal company is to make a profit, and a failing business typically wouldn't do that even if the debt was wiped out.

Football clubs, on the other hand, have a habit of being run by people who have no concern about making a profit.

[Svlad Cjelli]

Interesting snippet on the BBC Sport site; since 1992, football clubs have entered administration 53 times in English football, yet since 1963, no German clubs have become insolvent.

The law in England is fairly inconsistent with other countries.
Here there is no option for a company to go into administration, write off a bunch of debt and continue.
If you go bankrupt, that's it - your company will be dissolved and the parts/stock/components that make up your business will be sold off to the highest bidder by the administrator.
There's no easy fix like there is in England, where basically you can run your company down the shitter, essentially shout "I'm going into Rehab" like Denis Leary, screw all the people you owe money up the ***, and continue on like nothing ever happened, and repeat this process ad nauseum.

So basicly the law needs to change, why nobody realises this is beyond me.

Because again that's focusing on what happens after the financial damage is done at a club. The answer has got to be regulation and financial monitoring to ensure that clubs can never get into that kind of financial mess in the first place.

And that's the difference in insolvency events between here and there - in Germany the licensing and financial monitoring regulations ensure clubs can't get into that sort of financial trouble Clubs know that overspending means they'll be relegated as a punishment - and they have been -so trhey don't, because the penalty applies even if they don't go into administration or go bust, which is usually the first sign of problems here - when it's all too late.

[Barry the bird boggler]

That is exactly what is needed here and exactly what should be laid down in law in all countries. Fingers crossed that whatever comes out of the court case or government legislation works someway along these lines

[Svlad Cjelli]

To answer a previously-asked question, details of the court casseon Fottball Creditirs Rule are here : http://www.insolvencynews.com/article/show/Football-creditors-outcome-set-for-Spring-2012

[Svlad Cjelli]

Being reported yesterday that Barclays are demanding Blackburn repay their £10M overdraft by Christmas. Not sure what the implications are but they can't be good.

Also been told that things inside the club are utterly chaotic and likely to fall apart at any time.

[Barry the bird boggler]

Looks like another Portsmouth is on the way there then. Yet all you hear from their fans is "Steve Kean out".

[Svlad Cjelli]

Looks like another Portsmouth is on the way there then. Yet all you hear from their fans is "Steve Kean out".

Maybe it's very easy for them to believe their owners are rich, while in fact they might be bankrupt?

I'm not sure they know or care if their owners are rich or not. They just want them - or anyone - to lavish money on their team and expect no return for it.

[Ian Royal]

Being reported yesterday that Barclays are demanding Blackburn repay their £10M overdraft by Christmas. Not sure what the implications are but they can't be good.

Also been told that things inside the club are utterly chaotic and likely to fall apart at any time.

Not surprising, they're looking near certs for relegation and are pretty unlikely to bounce straight back up. Barclays sensible in trying to get their money back whilst the PL will be desperate to keep them from folding to preserve it's image. Much harder to get it back once they go down.

Dirk, do you still get parachute payments if you keep getting relegated? So would you get them in League One? Does that mean you could now end up with a club in the conference getting multiple millions from the PL in parachute money? It'd only take three more relegations and the payments are over 4 years aren't they?

[Svlad Cjelli]

Being reported yesterday that Barclays are demanding Blackburn repay their £10M overdraft by Christmas. Not sure what the implications are but they can't be good.

Also been told that things inside the club are utterly chaotic and likely to fall apart at any time.

Not surprising, they're looking near certs for relegation and are pretty unlikely to bounce straight back up. Barclays sensible in trying to get their money back whilst the PL will be desperate to keep them from folding to preserve it's image. Much harder to get it back once they go down.

Dirk, do you still get parachute payments if you keep getting relegated? So would you get them in League One? Does that mean you could now end up with a club in the conference getting multiple millions from the PL in parachute money? It'd only take three more relegations and the payments are over 4 years aren't they?

I'm pretty sure you do, yes, it's £16M a year for the first 2 years then £8M a year for the 2 years after that - so £48M in total.

In reality, though, the odds are a club would be in administration long before the 4th year if they fell that quickly (even with parachute payments) and so the payments would end at that point.

[Mr Angry]

Being reported yesterday that Barclays are demanding Blackburn repay their £10M overdraft by Christmas. Not sure what the implications are but they can't be good.

Also been told that things inside the club are utterly chaotic and likely to fall apart at any time.

Blackburn are a text book example of a football club bought by business people (generally, but not exclusively, foreign business people) who think that, because the sums of money for transfers, wages and TV money appear so huge, its a licence to print money for themselves and allow them to make a fortune. The Venky's set the tone by stating that Big Sam would get a transfer war chest of £5M, and that "star" players would be brought in for free on loans....

[Cobi]

Being reported yesterday that Barclays are demanding Blackburn repay their £10M overdraft by Christmas. Not sure what the implications are but they can't be good.

Also been told that things inside the club are utterly chaotic and likely to fall apart at any time.

Blackburn are a text book example of a football club bought by business people (generally, but not exclusively, foreign business people) who think that, because the sums of money for transfers, wages and TV money appear so huge, its a licence to print money for themselves and allow them to make a fortune. The Venky's set the tone by stating that Big Sam would get a transfer war chest of £5M, and that "star" players would be brought in for free on loans....

And then they sacked Allydyce because he wasn't a successful enough manager...... and then appointed Steve Keen, and improved his contract twice since.

[Mr Angry]

Being reported yesterday that Barclays are demanding Blackburn repay their £10M overdraft by Christmas. Not sure what the implications are but they can't be good.

Also been told that things inside the club are utterly chaotic and likely to fall apart at any time.

Blackburn are a text book example of a football club bought by business people (generally, but not exclusively, foreign business people) who think that, because the sums of money for transfers, wages and TV money appear so huge, its a licence to print money for themselves and allow them to make a fortune. The Venky's set the tone by stating that Big Sam would get a transfer war chest of £5M, and that "star" players would be brought in for free on loans....

And then they sacked Allydyce because he wasn't a successful enough manager...... and then appointed Steve Keen, and improved his contract twice since.

Did they? He was sacked a year ago yesterday, and I thought it was because he had a disagreement with them concerning the money that he could spend in the January transfer window, rather than any thoughts that he was an "unsuccesful" manager.

[Royal Rother]

Venky's said at the time that Allardyce was sacked because his record in the transfer market was poor and that they did not consider him to be the right type of person to fit in with their vision of where they wanted to take the club.

I think they also said that he was not a Top 5 club manager.

[Friday's Legacy]

as a supporter of blackburn you must have been livid to have so called big time owners come in and promise a war chest for the manager and then hear that they meant £5m. Then as mentioned they sacked big sam and suggested they wanted a top manager to come in, and they get steve keen. what a shambles. as for allydyce's record in the transfer market, what are they on about? he worked miracles at bolton on one of the smaller budgets in the premiership. one would have thought blackburn emulating bolton's top ten finishes would have been more than suitable considering their tight fisted approach to building a top four club.

[Barry the bird boggler]

Odd that Bolton also look likely for the drop as well then! One wonders what would happen to them if they drop into the Championship and don't get an immediate return.