Changes to football creditor role - new court case

[Gwylan]

Haven't seen any mention of this - it seemed to have been missed in the fallout from the Pompey case - but this could have massive implications for football if HMRC wins this case.

It's not good news for small clubs that could be owed money

HMRC challenge to creditors rule could cause chaos in football | Football | The Guardian

 

[Albion Dan]

But why should a club, small or otherwise, be different to any other business owed money?

 

[Gwylan]

But why should a club, small or otherwise, be different to any other business owed money?

Well, it shouldn't but that's not the way football has worked. As the article says, even Portsmouth's QC said it wasn't fair that HMRC was treated differently,

I bet we'll start seeing more transfers with money up front if this goes through.
And I wonder if we'll see a club try to wind another one up.

 

[Horton's halftime iceberg]

Interesting piece on Notts County, I also heard that Man City will struggle to not breach a similar FIFA rule on club income in relation to wage bill. The owners tried to pump huge amounts of cash in via sponsorship, but this loop hole is being closed.

Bizzare world, also great photo on that link of the Pompey shirt discounted.

Notts in wage drain

As Paul Ince attempts to make it third time lucky tomorrow after two defeats as the manager of Notts County, the League One club have made history of sorts this year. Their promotion as champions from football's fourth tier last season was done in flagrant breach of the Football League's salary cap. County's promotion came as their then owners, Qadbak, crashed the club through the 60% wages-to-turnover ceiling. When Qadbak vanished, Ray Trew, the owner who rescued the club, said it had been left with almost £6m of debt. Now the League has taken steps to toughen up the salary cost management protocol, requiring copies of agreements between clubs and funders

 

[Jim D]

It looks like this all about big clubs buying players in installments? If the smaller club is still owed money then they will miss out? Surely the answer is to make all transfers cash up front. That way all the money is paid when the player moves. Of course, if there are any other clauses (matches played, international caps, sell-on) then that should be paid in full at the time too.

At the moment the bigger clubs have it every which way and the smaller clubs just have to play along or else there isn't a deal at all.

 

[Danny-Boy]

Haven't seen any mention of this - it seemed to have been missed in the fallout from the Pompey case - but this could have massive implications for football if HMRC wins this case.

It's not good news for small clubs that could be owed money

HMRC challenge to creditors rule could cause chaos in football | Football | The Guardian

I agree completely.
Having once worked in insolvency, the whole issue of "preferred creditors" in the context of football clubs is clearly totally different from that in everyday commerce.

For players, other clubs, (and agents?) to get 100% payouts when organisations like the emergency services are treated as unsecured creditors is patently unjust.

 

[Jim D]

And I wonder if we'll see a club try to wind another one up.

Aren't Hartlepool trying to do exactly that with Billingham FC?

 

[Lord Bracknell]

A substantial proportion of the money that is sloshing about in the world of football comes not from trading as a business, but from cash handed out by the League authorities from the pot that the PL and FL have negotiated from the TV companies.

The preferential treatment given to football creditors when a club goes bust (backed up by the 'golden share' rule) is simply a way of ensuring that the TV money stays in football.

If HMRC win their case in February, presumably there will be a change in the way in which TV money is divvied out. The safest way would be to ensure that it only goes to clubs that the football authorities deem safe enough to look after it.

I can see League-controlled franchising on the horizon.

 

[Gwylan]

Aren't Hartlepool trying to do exactly that with Billingham FC?

I had missed that case, just been reading about it now.

Slightly different, it's not about a transfer payment but not a very edifying spectacle.

 

[KZNSeagull]

If clubs are not paying the emergency services, can the emergency services refuse to attend and therefore get games cancelled on H&S grounds? Just wondering.

 

[Danny-Boy]

Aren't Hartlepool trying to do exactly that with Billingham FC?

Brighton and a Croydon club come to mind....

 

[severnside gull]

And I wonder if we'll see a club try to wind another one up.

Hartlepool are already doing it to Billingham