Southampton in administration ? ? ? ?

[Pete Raven 276]

Makes for interesting times should they beat the drop....

[Jim Smith 2,314]

[quote user="mr carra"]

surely the point will be that Southampton football club won''t be ''getting away with it'' because it isn''t their debt so they are not running a financially unviable operation.

 

For example, would we expect as a club to be punished by the FA and given a points deduction if Delia herself as an individual ran up huge debts on something?

[/quote]

 

No the point is they will be getting away with it and if they do it will be giving the green light to all clubs to put in place a corporate structure that enables them to transfer debt and liabilities to other group companies, go into admin and write them off and suffer no points deductions or penalties on the footballing side. This company has run up £30m of Southampton FC related, football related debt (mainly on their new stadium as I understand it). it is not the same as Delia going bust because nobody has bought her cook books!

It looks like a loophole and it will be interesting to see if the league can stop it. I suspect not and we will end up with Saints getting away with it but the rules being changed to hit the next club that does it hard! There should be some kind of overarching rule like the one in the prem whereby clubs have a duty to act in good faith towards each other to catch this sort of thing!

[Grando 260]

If they stay up expect lots of bungled court wrangling just like with Sheff Utd and West Ham. Let''s just hope we''re clear of it all by that point and not relying on a judge''s decision to desperately keep us up.

[GMF 736]

[quote user="Jim Smith"][quote user="mr carra"]

surely the point will be that Southampton football club won''t be ''getting away with it'' because it isn''t their debt so they are not running a financially unviable operation.

 

For example, would we expect as a club to be punished by the FA and given a points deduction if Delia herself as an individual ran up huge debts on something?

[/quote]

 

No the point is they will be getting away with it and if they do it will be giving the green light to all clubs to put in place a corporate structure that enables them to transfer debt and liabilities to other group companies, go into admin and write them off and suffer no points deductions or penalties on the footballing side. This company has run up £30m of Southampton FC related, football related debt (mainly on their new stadium as I understand it). it is not the same as Delia going bust because nobody has bought her cook books!

It looks like a loophole and it will be interesting to see if the league can stop it. I suspect not and we will end up with Saints getting away with it but the rules being changed to hit the next club that does it hard! There should be some kind of overarching rule like the one in the prem whereby clubs have a duty to act in good faith towards each other to catch this sort of thing!

[/quote]

Agreed Jim Smith and just remember that our "friends down the A140" have a holding company above the football club!

[Niche 0]

Exactly as Jim says - if they were able avoid penalty, then every club would simply create a subsidiary that held the registration with the Football League, and merely leased assets from the holding company.

[SWP = Poor Mans Ruel Fox!! 0]

 

Think the main point to look at is they are desperately seeking a buyer for the football club so that it doesnt follow the parent company into administration.  If they cannot find a buyer, which is possible in the current climate, they will have no choice but to enter the football club into administration.

[LQ 0]

It may be misplaced confidence on my part but I don''t think the FL will let them get away with squirming through this ''holding company'' loophole.Jim Smith is spot on, it''s nothing like Delia going bust. This compan only exists to own the football club and its periphery companies so in effect it is the football club. The FL learned their lesson with ITFC and that''s why they could impose new tariffs against Leeds and Luton for the way their administrations were handled.I can see them having the points off this season (if they''re not relegated as a matter of course) and having a further deduction imposed next.

[singing canary 0]

so southampton could transfer the debt from the football club to the parent company , then the parent company go into administration , thus not affecting the football club .

if this is the case its not fair , when other clubs such as ourselves have to pay back what we owe .

as i said before , if this is the case and southampton get off without losing points its a bloody crime .

prent company , sister company , they are directly conected with eachother , this cant be right .

[singing canary 0]

i ment parent not prent !!!

[Jim Smith 2,314]

 

Well lets hope then that our "friends" at Norwich Union play hard ball this time and don''t allow any buyer to acquire Saints £24m debt to them for £2m or something so as to facilitate a sale!

[LQ 0]

Amen to that!

[singing canary 0]

what like how they helped ipswich out ..!!!.. im not surprised they want to change thier world wide name from norwich union to aviva.

they are no more norwich orientated than a scummer!!!

[Duffman 0]

[quote user="singing canary"]

what like how they helped ipswich out ..!!!.. im not surprised they want to change thier world wide name from norwich union to aviva.

they are no more norwich orientated than a scummer!!!

[/quote]Don''t let the facts get in the way of a good bashing.   Maybe you should search the internet and actually read the story of what happened.I imagine you won''t bother though and just continue to believe what you think is the truth   [8-)]

[singing canary 0]

didnt norwich union write off alot of debt ipswich owe , im sorry if im wrong ...

[Jim Smith 2,314]

[quote user="Duffman"][quote user="singing canary"]

what like how they helped ipswich out ..!!!.. im not surprised they want to change thier world wide name from norwich union to aviva.

they are no more norwich orientated than a scummer!!!

[/quote]

Don''t let the facts get in the way of a good bashing.   Maybe you should search the internet and actually read the story of what happened.

I imagine you won''t bother though and just continue to believe what you think is the truth   [8-)]
[/quote]

 

In essence it is the same as with Ipswich. They did not do it to "help Ipswich out" though admittedly. They (in that case Morley) did it to try and recover what they could from a hopeless situation and therefore get something rather than nothing.

I guess if this Southampton Company owns the stadium and land around it they at least have some assets to take so maybe NU will be more robust this time!

[TheCardinal 0]

Looks as if they''ll get away with it

http://www.dailyecho.co.uk/sport/saints/news/4251026.Football_League_says_Saints_will_not_be_deducted_points/

[CaptnCanary 0]

I think if the FA think they are trying to pull a crafty one they will come down hard on them. Look what happened when Leeds tried it. I think this will be totally legit in that the club will be sold as an asset and will not be put into admin or they will end up with a 10 or more points deduction. At the end of the day though, as far as we are concerned, if we finished below Southampton we would likely be relegated whether they get a points deduction or not so I don''t see it as all that significant to us which ever way it goes.

[Niche 0]

[quote user="TheMarshmallowMonkey"]Looks as if they''ll get away with it

http://www.dailyecho.co.uk/sport/saints/news/4251026.Football_League_says_Saints_will_not_be_deducted_points/[/quote]If that proves to be the League''s stance, then I would suggest that NCFC should be rapidly looking to restructure it''s dealings in the same manner.However.....using Derby as the example could prove spurious, as there was a consortium in place to take on the debts and obligations of the parent, and this was presumably agreeable to both the League and the Co-Op Bank. There is no evidence that Southampton have such an arrangement in place.

[missing in action? 0]

they are ok for now.until the administrators go in on the company that owes them and gets rid of all their costly assets (southampton fc).then southampton will be left with no money, no owner, and no hopedepends on time frame though.

[blinded by the story 0]

Shouldn''t we be relying on the Football rather than the financial issues between quote me happy and Southampton to save us?

[blinded by the story 0]

How sad that we celebrate the posibility of avoiding relegation by this. Whats next, sending somebody to put laxatives in the food at Sprowston Manor so that Sheffield cannot muster a team on saturday. This shows how little faith some fans have in our ability to play football to avoid relegation. 

[BigFish 1,986]

[quote user="blinded by the story"]Shouldn''t we be relying on the Football rather than the financial issues between quote me happy and Southampton to save us?[/quote]

Dead right, we cannot and should not be looking for a get out of jail free card on this - the boys should be able to do it.

Still, I am afraid Jim is wrong on this and has led a number of posters up the garden path on this one. It is a resonably common model to have the physical assets and debt held by a holding company while an operatational company runs the football side. There is nothing implicitly shady about this. NCFC don''t chose to do this and our friends down the A140 are just one of a number who do.

The rule was created to prevent clubs getting a competitive advantage by over investing in the playing side and then walking away if this doesn''t work leaving the creditors, in particular the football ones, with the debt. This does not appear to be the case with Saints who have been running down the side for a couple of seasons so the rule would not apply either in fact or in principle. What seems to be the case and validates the holidaying Mr Carrow''s position is that the holding company cannot service the debts accrued against infrastructure, mainly St Mary''s. This is exactly analogous to Delia going bust causing the rule to apply to us. And effectively West Ham where the Icelanders have all kinds of problems while no one would suggest the clubs does.

A holding company is not the panacea to our debt problems. If the company holding the physical assets goes bust the administrator or liquidator is then required to get the best posible price for the assets. If NCFC holdings went bust Carrow Road could be sold off for development without the club having any say in the matter, the funds to purchase it or the cash to buy a new stadium. The ghost of Wimbledon should haunt any who suggest this might be a way forward.

[whoareyou? 0]

As i understand it, debt owed to other clubs HAS to be paid in full otherwise the Football League or FA withdraw the club''s right to compete in their competitions.

[Niche 0]

[quote user="BigFish"]Still, I am afraid Jim is wrong on this and has led a number of posters up the garden path on this one. It is a resonably common model to have the physical assets and debt held by a holding company while an operatational company runs the football side. There is nothing implicitly shady about this. NCFC don''t chose to do this and our friends down the A140 are just one of a number who do.[/quote]I don''t think there''s any implication that the business model is in anyway unusual, just that the application of the League rules as claimed makes this a very tempting structure to avoid administration penalties. If you have the situation, as here, where the holding company is insolvent due to being unable to service it''s debts as a result of the ''football club'' as a whole generating insufficient revenues, then it would appear inequitable that they may avoid a points deduction because of company structure.

[spudgfsh 0]

[quote user="TheMarshmallowMonkey"]Looks as if they''ll get away with it However.....using Derby as the example could prove spurious, as there was a consortium in place to take on the debts and obligations of the parent, and this was presumably agreeable to both the League and the Co-Op Bank. There is no evidence that Southampton have such an arrangement in place.
[/quote]

and wasn''t there something dodgy about the deal in the first place?

http://news.bbc.co.uk/1/hi/england/derbyshire/7933016.stm

[Jim Smith 2,314]

[quote user="BigFish"]

[quote user="blinded by the story"]Shouldn''t we be relying on the Football rather than the financial issues between quote me happy and Southampton to save us?[/quote]

Dead right, we cannot and should not be looking for a get out of jail free card on this - the boys should be able to do it.

Still, I am afraid Jim is wrong on this and has led a number of posters up the garden path on this one. It is a resonably common model to have the physical assets and debt held by a holding company while an operatational company runs the football side. There is nothing implicitly shady about this. NCFC don''t chose to do this and our friends down the A140 are just one of a number who do.

The rule was created to prevent clubs getting a competitive advantage by over investing in the playing side and then walking away if this doesn''t work leaving the creditors, in particular the football ones, with the debt. This does not appear to be the case with Saints who have been running down the side for a couple of seasons so the rule would not apply either in fact or in principle. What seems to be the case and validates the holidaying Mr Carrow''s position is that the holding company cannot service the debts accrued against infrastructure, mainly St Mary''s. This is exactly analogous to Delia going bust causing the rule to apply to us. And effectively West Ham where the Icelanders have all kinds of problems while no one would suggest the clubs does.

A holding company is not the panacea to our debt problems. If the company holding the physical assets goes bust the administrator or liquidator is then required to get the best posible price for the assets. If NCFC holdings went bust Carrow Road could be sold off for development without the club having any say in the matter, the funds to purchase it or the cash to buy a new stadium. The ghost of Wimbledon should haunt any who suggest this might be a way forward.

[/quote]

 

Sorry never said it was unusual just that it gives a green light to others to do the same and for me that is deeply unsatisfactory. I accept we could do the same if we were so inclined.  They have used this company to obtain finance and build the new stadium. Presumably this also allowed them to sell off the old ground for redevelopment and earn money which ahs also gone towards the football side of the business. Regardless of the "corporate veil" this is the company that has been running southampton football club. Its nothing like Delia or the Icelanders. The Icelandic owners had/have huge problems associated with completely separate businesses and nothing to do with west ham..

This Southampton company was set up solely to run the football club and lists its business purposes solely as running it subsidiary southampton football club. It has accrued its debts building their gound and running the club.

The interesting aspect with Saints is whether a buyer comes forward. I bet you if one does it will be associated with the current owners and looking to pick up the company on the cheap and less the current debts.

 

[BigFish 1,986]

[quote user="Niched"][quote user="BigFish"]Still, I am afraid Jim is wrong on this and has led a number of posters up the garden path on this one. It is a resonably common model to have the physical assets and debt held by a holding company while an operatational company runs the football side. There is nothing implicitly shady about this. NCFC don''t chose to do this and our friends down the A140 are just one of a number who do.[/quote]

I don''t think there''s any implication that the business model is in anyway unusual, just that the application of the League rules as claimed makes this a very tempting structure to avoid administration penalties. If you have the situation, as here, where the holding company is insolvent due to being unable to service it''s debts as a result of the ''football club'' as a whole generating insufficient revenues, then it would appear inequitable that they may avoid a points deduction because of company structure.
[/quote]

Indeed it does. However there is no suggestion at the moment that NCFC cannot service its debts as a result of the clever securitisation scheme which makes it impossible for us to have this corporate structure. What we do have a problem with is funding the football side!!!![:O]

[rjwc22 0]

According to Auntie Beeb if the club wipe out a significant portion of their debt in this move they will still be liable to incur a points penalty.

[Jim Smith 2,314]

[quote user="BigFish"]

[quote user="Niched"][quote user="BigFish"]Still, I am afraid Jim is wrong on this and has led a number of posters up the garden path on this one. It is a resonably common model to have the physical assets and debt held by a holding company while an operatational company runs the football side. There is nothing implicitly shady about this. NCFC don''t chose to do this and our friends down the A140 are just one of a number who do.[/quote]

I don''t think there''s any implication that the business model is in anyway unusual, just that the application of the League rules as claimed makes this a very tempting structure to avoid administration penalties. If you have the situation, as here, where the holding company is insolvent due to being unable to service it''s debts as a result of the ''football club'' as a whole generating insufficient revenues, then it would appear inequitable that they may avoid a points deduction because of company structure.
[/quote]

Indeed it does. However there is no suggestion at the moment that NCFC cannot service its debts as a result of the clever securitisation scheme which makes it impossible for us to have this corporate structure. What we do have a problem with is funding the football side!!!![:O]

[/quote]

 

The most galling thing is that its arguably because we have always tried to do the right thing and have a (reasonably) manageable debt and an asset base that we are arguably much less attractive as a take-over target than most other clubs in the division!

[PurpleCanary 5,554]

I''ll make one prediction about this. If Southampton don''t get docked points and so stay up, the club finishing 22nd will sue.