STV info on Administration.

[sairdy 0]

Since the turn of the century, seven Scottish clubs have entered administration. With Rangers new owner Craig Whyte having admitted that he is working to avoid taking the Ibrox club down the same road, the spectre of insolvency still hangs over the national game.

 

The business implications of calling in the administrators are countless and can threaten the existence of a company, or provide it with a road to recovery. The sporting implications also have to be considered, and with clubs answerable to as many as four different governing bodies for different competitions, can be wide reaching.

 

We've put together a layman's guide to the rules and regulations regarding administration from the authorities concerned and answered some of the key questions often posed.

 

How many points will an SPL club be deducted?

 

The simple answer is 10 points. The only way a club can be deducted more than 10 points is if it goes into administration twice in the same season.

 

When will they lose the points?

 

If the "insolvency event" occurs during the season, the points are docked straight away. If it happens in the close season, the club starts the next season on minus 10 points.

 

Can a club appeal a points deduction?

 

Only if it can prove it did not go into administration.

 

What happens if administration lasts over more than one season?

 

If a club begins a season in administration, they will begin on minus 10 points.

 

What happens if a club goes into administration twice in one season?

 

Ten points are docked each time a club goes into administration, unless the events are linked. It is up to the SPL board to decide, this can be appealed.

 

Will a club still be able to sign players?

 

No. The only exception is if a team requires an emergency goalkeeper or if a club is looking to replace a player who has left the club. This means no permanent transfer and no loan signings. Clubs can still sell players. The SPL board has the final say.

 

How many points will a First, Second or Third Division (SFL) club lose?

 

The SFL do not have a set figure. The amount docked from clubs is decided by the board on a case-to-case basis. The SFL are also likely to impose a registration embargo. There are no fixed punishments and the SFL can set any conditions it chooses.

 

Can an SFL team be thrown out of the league mid-season?

 

No. Gretna and Livingston were relegated to the Third Division for being in administration but this can only happen in the close season.

 

What can the Scottish FA do to clubs?

 

The Scottish FA's Judicial Panel has the power to suspend or terminate the membership of any club which goes into administration. This has never happened.

 

Alternatively, the SFA can instead choose to â??censure, fine, sanction and/or penalise the member in such manner as it considers appropriateâ?. This has nothing to do with points deductions. The SFA has never exercised this power.

 

Another option available to the SFA is to exclude a club from the Scottish Cup. This is a new provision which first appeared in the organisationâ??s articles of association in the 2011/12 season.

 

Can UEFA do anything to Scottish clubs in administration?

 

If a club is playing in Europe, it needs a UEFA club licence. If a club goes into administration but has already been given permission to play, it will not lose its licence for the season.

 

Would a club get a new licence when in administration?

 

It is unlikely. The club would have to prove it owes no money to other clubs, to its employees, and to HM Revenue and Customs.

 

Additionally, the club would also have to prove to the SFA it is likely to survive until the end of the season in which the licence applies to. Club licenses are valid for one season and are granted at the start of each season.

 

What happens when a club wants to exit administration?

 

A Company Voluntary Arrangement (CVA) is drafted for a club to try and reach an agreement with its creditors. Clubs must agree with those it owes money to over how much to pay back, and over what period of time.

 

Everyone who is owed money is then invited to vote on the proposal. A 'yes' vote is required from creditors up to 75% of the value of the overall debt. For example, if total debt is £10 million, the company must receive the backing from creditors to the tune of £7.5 million.

 

How long does it take before the club is out of administration?

 

If a CVA is approved, creditors have a period of 28 days to register their opposition to the decision.

 

If there is no opposition, the club exits administration and continues in its current form, paying back its creditors over the agreed period of time.

 

What if a club fails to reach an agreement?

 

A club may try again to reach a satisfactory agreement with its creditors. But, if is unable to agree a deal, the company will be dissolved and the club will cease to exist.

 

There is an alternative for football clubs. As was the case in England with Leeds United, the insolvent company can create a "phoenix" club and attempt to transfer every part of the club to a new business, leaving behind the debt.

 

http://sport.stv.tv/football/scottish-premier/rangers/277010-what-happens-when-a-football-club-goes-into-administration/

 

Administration has been a key concern for Scottish football clubs in recent years with seven clubs having gone through insolvency.

 

In part one of our analysis, we looked at cases when a club goes into administration and emerges having resolved its debts.

 

However, in rare cases, a club can go into administration and be reborn as a "phoenix" company. This has most notably happened at Leeds United in 2007.

 

So what is a "phoenix" company?

 

A company that is set up to replace the old football club's parent company but that wants to run the club and keep the team in competition.

 

Can they just take over everything without the team being relegated or having to start in the Third Division?

 

They can, but they have to get approval from all the major bodies in the game. There are licences, shares and memberships that have to be moved over to the new company and each governing body has to make a decision.

 

For Scottish top flight clubs, two bodies have to give consent. The Scottish Premier League and the Scottish Football Association have to rule on the new application. A place in the League Cup, run by the Scottish Football League, is automatic if the club is entered into the SPL or the SFL.

 

How does the "phoenix" club keep its Scottish Premier League place?

 

The SPL is jointly owned by all of the top-flight clubs, who hold an equal share in the business. The share is held by the administrator of the old, dissolved company but can be transferred to the â??phoenixâ? club. The SPL board has to approve the transfer.

 

The SPL board can put conditions in place before they give their approval. That can mean they impose a points deduction or any other terms they think are appropriate.

 

The conditions for entry are set by the SPL board, and not the representatives from the remaining 11 member clubs. The board consists of Ralph Topping (SPL chairman), Neil Doncaster (SPL chief executive), Eric Riley (Celtic), Stephen Thompson (Dundee United), Derek Weir (Motherwell) and Steven Brown (St Johnstone). Topping has the casting vote in the event of a split decision.

 

With the SPL rules bearing a broad similarity to the regulations of the Football League in England, a situation they dealt with can give a hint to how things may be handled in Scotland.

 

Has it been done before?

 

Yes. Leeds United went into administration they failed to reach a CVA in 2007. A â??phoenixâ? company, Leeds United 2007, was created and an application was made to transfer their share and membership of the English Football League.

 

The Football League accepted the application but said that the new company, closely linked to the previous dissolved club, couldn't start without some terms being imposed, to keep the spirit of the rules.

 

The â??phoenixâ? company was allowed to take its place in the competition but in that specific case the board only granted the transfer on the condition Leeds started on minus 15 points.

 

There's no guarantee that the Scottish Premier League would act in the same way as their counterparts in England but the similarities between the regulations mean that the precedent may be used as a guide.

 

So will my team be deducted 15 points or more?

 

It should be stressed that the figure of 15 points imposed by the Football League was discretionary and was a one-off.

 

Reports that the SPL would dock 15 points, 25 points or more are speculation. The SPL could impose any conditions, or none at all, if they allowed a share to be transferred.

 

Does the same apply to Scottish Football League clubs?

 

The SFLâ??s Constitution and Rules (Rule 13) give them the same powers over membership that the SPLâ??s regulations detail for their competition.

 

If a new company is created, the League would make the decision on whether to grant a transfer of membership, imposing any terms and conditions as it sees fit.

 

And what about the SFA, do they have to grant permission?

 

The SFA also exercise their authority on the transfer of membership and forbids any transfer of membership without its permission. The governing body makes it clear in their Articles of Association (14.1) that when a transfer is requested, a review is undertaken by the board.

 

The board has complete discretion to grant or reject an application for transfer but also retains the right to impose any conditions or terms on the â??phoenixâ? club.

 

Do the SFA decide on whether the club gets into Europe, provided they qualify?

 

No, UEFA decide that. They issue a club licence every year to sides who make the Europa League or Champions League.

 

Clubs need to be granted a licence to take part in European competition and applications are made on a season by season basis.

 

As stated earlier, if a club enters administration during the season then the licence is not immediately withdrawn so participation in the Europa League or Champions League can continue.

 

If a â??phoenixâ? club is created though, entry into European competition the following season would be affected. Transferring a membership is forbidden.

 

UEFA regulations state that a club must have been a member for three consecutive years in order to be eligible for a license. Any â??phoenixâ? club would be considered as a new entity and would begin a three year wait from its inception before being eligible to play in Europe.

 

http://sport.stv.tv/football/scottish-premier/rangers/277115-what-happens-when-a-club-in-administration-sets-up-a-phoenix-company/

[Ergatrude 0]

Message to Daily Record: Please read this & shut the fuck up, thanks William.

Edited November 1, 2011 by Ergatrude

[bluebear54 0]

Message to Daily Record: Please read & shut the fuck up, thanks William.

 

First of all - many thanks for posting this Sairdy.

Secondly, eloquently put, Ergatrude.

On the subject of rumours, heard Chick Young on the way home. He was getting his tuppence-worth on the subject of rumours about dressing room barneys at Sellik. The bold Young says - I never like talking about rumours, it only helps to give them credence. And anyway I don't do football forums.

Both of these statements are porkies. I know.

How can the man live with himself?

[Zappa 0]

First of all - many thanks for posting this Sairdy.

Secondly, eloquently put, Ergatrude.

On the subject of rumours, heard Chick Young on the way home. He was getting his tuppence-worth on the subject of rumours about dressing room barneys at Sellik. The bold Young says - I never like talking about rumours, it only helps to give them credence. And anyway I don't do football forums.

Both of these statements are porkies. I know.

How can the man live with himself?

 

El Chico can't wait to retire to the Costa Brava and blog about La Liga. :devil:

[bluebear54 0]

El Chico can't wait to retire to the Costa Brava and blog about La Liga. :devil:

 

It makes me boak to think my license fee has funded his pension ..............

[GovanAllan 0]

Well said Ergatrude. It's amazing to watch, as the bbc get more and more outrageous with their reports and programmes on the tax case that the STV are getting more and more even handed and just telling it like it is.

[GovanAllan 0]

First of all - many thanks for posting this Sairdy.

Secondly, eloquently put, Ergatrude.

On the subject of rumours, heard Chick Young on the way home. He was getting his tuppence-worth on the subject of rumours about dressing room barneys at Sellik. The bold Young says - I never like talking about rumours, it only helps to give them credence. And anyway I don't do football forums.

Both of these statements are porkies. I know.

How can the man live with himself?

 

Do you think he said that with a straight face. If the story was about us he would be spunking on the mic trying to get it out.

[Zappa 0]

Do you think he said that with a straight face. If the story was about us he would be spunking on the mic trying to get it out.

 

Speculating about the demise of Rangers is the only time El Chico gets a bricky!

[GovanAllan 0]

Speculating about the demise of Rangers is the only time El Chico gets a bricky!

 

Just gave me a nightmare vision of a sketch for " Only An Excuse " at new year.

[Zappa 0]

It makes me boak to think my license fee has funded his pension ..............

 

Somebody mentioned something about abstainment or a boycott or something. Not sure what it was about though...