Issue Administration is a genuine punishment

As told by Paul Firth

This article is in reply to Football’s Administration Punishments Need To Change To Avoid Uncertain Futures

BfB is nothing if not democratic. In the language of all football fans, it’s a game of opinions. There are some places where there’s only one opinion that counts. Many of us have worked in places like that. But BfB is not that place. So, when Michael Wood posts his piece about how to deal with the ever increasing risk of a club going into administration and one of the other contributors wants to disagree with him, this is the result!

Let me say at the outset how very fortunate I believe my beloved team have been to go into administration at the right times. Not for us the 10 point penalty on either occasion Bradford City went into administration. We got in just in time. It would, of course, have been far preferable not to have got in at all, but there’s no point in rehearsing the reasons behind either of those two periods of financial difficulty.

These days it’s hard to keep up with who is and who isn’t in administration in the lower leagues. Even more difficult to work out is how some of these clubs are coming out of administration. Both are increasingly essential considerations as long as the present system is in place.

Take Luton Town, for instance. They went into administration last season and suffered a 10 point deduction. Those points in themselves cost them nothing. They finished 17 points below the safety mark. The administration and the associated inability to sign new players may well have cost them their League One place – but the deduction didn’t. It was a penalty that imposed no punishment.

Others have achieved the same in recent years. Leeds and Boston both went into administration when the points deduction was irrelevant. They were both already relegated. This brought about a rule change, which would allow such a deduction to be carried forward to the next season, when it might have a true meaning.

Bournemouth’s 10 point loss certainly was a punishment. They finished only two points below the safety line. Rotherham’s 10 point deduction left them 14 points away from the promotion play-offs, but again it could be argued that the fact of going into administration and the surrounding uncertainty knocked all the stuffing out of a very promising season spent, to that point, in or very near the play-offs.

But it is what comes next that matters more. As Leeds found, if you won’t or can’t get out of administration via a CVA, the Football League’s preferred option, you run a risk of a second penalty. Their 15 point penalty, thanks eventually to their Wembley defeat, was a genuine punishment. They will still be playing in League One next season. Without the deduction they would have gained automatic promotion.

All three of the League Two teams who start the new season in administration face the serious prospect of ‘doing a Leeds’. All three may come out of administration by a non-CVA route and, if so, will face the 15 point deduction for 2008-9 after their 10 point deductions for 2007-8. Additionally Luton already face another 10 point penalty for completely different breaches committed by those no longer involved with the club. Luton could start on minus 25 points and, just to avoid relegation to the Conference, they may need to win the number of points that would normally achieve a play-off place.

While all this could give Bradford City a head start on three of our League Two rivals, the bad news is that we did actually come out of administration via a CVA twice. OK, so Leeds United missed out on promotion last season. But this season they start with a clean sheet on and off the field. We all know it has taken City several years to achieve a financial break-even point and the present company still faces annual payments from the CVA that bite into the limited budget.

So the question I want to pose is not, as Michael writes, whether the penalty points system is too harsh on teams in the lower reaches of football and finance, but whether taking the 15 point hit might be seen to be preferable by some directors, providing only that their club can get over the one hurdle of the next season.

We can’t dwell on the Leicester scenario. That couldn’t happen now. Nor would I support Michael’s relegation-and-promotion proof suggestion, mainly because it would have involved two League One teams, Cheltenham and Crewe, being relegated and Luton, 17 points behind Crewe, surviving, when at the start of the season all of them believed that the four teams with the fewest points would go down. Why should Cheltenham and Crewe and their supporters suffer for the financial mishandlings of the boards at Luton and Bournemouth? And how long might it be before some directors decided that it was worth the 15 points, if they were guaranteed not being relegated?

But someone should suffer. A financial penalty is out of the question for a club that is in such debt it cannot continue to trade normally. What other penalty is available? Community service hardly fits the bill! A points deduction is less harsh than relegation, which is about the only alternative.

I believe that the Football League must do two things. The first they are already doing, although perhaps not quite well enough. They must at the start of each season make clear what their financial rules are and what the penalties for breach will be. That puts every club on notice. Go into administration and you know what to expect. Come out without a CVA and, again, you know what’s coming your way.

The second step the League must take is to make the semi-voluntary wages cap part of its own binding financial regulatory scheme. There is already in place a provision aimed at preventing clubs in the bottom two divisions from spending more than 60% of their income on players’ salaries. It was supposed to apply equally to the Championship, but there were too many big clubs there who wouldn’t play. It should be made a requirement of League membership that a club agrees to and complies with a salary cap. There should also be clear penalties for breaches. I would suggest a look at the Rugby League’s sliding scale, where the greater the excess the more points are deducted, would be a suitable guide.

Three final thoughts. I wonder what Julian Rhodes, the one in the middle of two administrations, would do if he were now given the option of the CVA which to this day takes it toll on the club or a clean financial sheet and a 15 point loss, even if that meant certain relegation. And how do the supporters of Halifax Town and Gretna feel? Wouldn’t they have preferred to have been forced to live within their means, even if a points deduction followed? And, last of all, I go back to how lucky City were with their timing and with the man whose offer allowed the CVA to be completed. Neither Bradford City nor any other league club should rely on that sort of luck ever again.