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Last Updated: Wednesday, 9 May 2007, 12:17 GMT 13:17 UK
Football chiefs mull clubs' debts
By Bill Wilson
BBC News, at Soccerex, Wembley Stadium

Rules determining the way Football League clubs go into administration, and the punishments they receive, look certain to be reviewed by the competition's bosses.

Leeds fans show a banner during the Coca-Cola Championship match between Derby County and Leeds United at Pride Park on 6 May 2007
Leeds fans are defiant in the face of their club's plight

Both Leeds United and Boston United called in administrators as the season grew to an end, with the Elland Road club thus incurring a 10-point penalty deduction this season instead of next.

Boston, who went into administration during their last game, have yet to hear their fate.

League chairman Lord Brian Mawhinney said: "Are we going to think about addressing this issue? Yes, we are.

"Is it [going into administration] allowed for by our rules? Yes, it is.

"But does it raise a number of questions? Yes, it does."

Channels open

Leeds United went into administration, but were immediately bought back from the administrators by a new company, headed by club chairman Ken Bates.

Lord Mawhinney, who became League chairman in 2003, said that when he took the helm, a number of clubs had gone into administration, and that over the past four years, that had changed.

David Healy of Leeds United
Leeds United now have no chance of evading relegation

"Until last week's events, we did not have any in administration," he told the BBC at the Soccerex football finance seminar at Wembley Stadium.

The chairmen of the 72 Football League clubs will hold their annual meeting in early June.

Lord Mawhinney said: "We will start thinking about the administration issue before the annual meeting.

"However, if we think the issue has not been properly discussed by then, we will not be bounced into making a decision at that time."

He said the League was listening to what the clubs were saying on the issue and "keeping 72 channels open".

Lord Mawhinney also pointed out that the Football League could not prevent clubs going into administration.

"They make their own decisions, they have their own directors," he added.

Right balance

Administration is undertaken by cash-strapped or indebted clubs to allow them to stay in business.

The League's 10-point penalty deduction was introduced to make sure clubs do not use it as any easy way of avoiding their financial responsibilities, or live beyond their means as they chase success on the playing field.

"We have tried to create a framework which encourages directors to handle their money sensibly for the sake of the clubs and fans, " Lord Mawhinney said.

"When I came into the Football League, the mantra of the clubs was 'Success', but I have tried to change that so that clubs seek the correct balance between seeking success and achieving sustainability."

There appears to be little hope of football creditors being paid in full under Boston United's Company Voluntary Agreement - which is a requirement of the League's articles and insolvency policy.


SEE ALSO
Bates calls for Leeds investment
05 May 07 |  Leeds United
Leeds Utd call in administrators
04 May 07 |  Business
Premiership entry 'is worth 60m'
02 May 07 |  Business

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