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Page last updated at 16:38 GMT, Thursday, 23 April 2009 17:38 UK

Penalised Saints face relegation

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Southampton may launch points appeal

Southampton have been effectively relegated after being docked 10 points by the Football League.

The ruling comes after Saints' parent company went into administration, though the club and administrators say they expect to launch an appeal.

Four points off safety with two games to go, Saints will lose 10 points if they stay up in the Championship.

And if they do not avoid finishing in the bottom three then the points penalty will take effect next season.

The south coast outfit had hoped to avoid the punishment as they argued that it was their parent company Southampton Leisure Holdings plc (SLH) which had gone into administration on 2 April - not the football club.

606: DEBATE
WestLondonSaint

But a League investigation by "independent forensic accountants" found that the football club and SLH were "inextricably linked as one economic entity" and applied their mandatory penalty.

The League also found that: "The holding company has no income of its own; all revenue and expenditure is derived from the operation of Southampton Football Club and the associated stadium company.

"The holding company is solvent in its own right. It only becomes insolvent when account is taken of the position of Southampton football club and the other group companies."

The statement added that there was no alternative other than to invoke the 10-point penalty.

It was also revealed that the company commissioned to look into the matter reported that co-operation with them was withdrawn towards the end of their enquiries.

However, Mark Fry, joint administrator of SLH, insisted he was "shocked and extremely disappointed" with the League's decision to deduct points.

Former chairman urges fans to back club

"The football club was not even aware that the investigation had been concluded," he told the BBC.

"We remain very firmly of the view that the rules do not apply, and that the Football League has stretched the rules to meet the circumstances. The football club is not in administration.

"The Football League is a members' organisation, and with any such body of that nature, you run the risk that if there is any grey area, they can interpret the rules as they see fit.

"I think they've interpreted the rules to suit the conclusion they wanted to reach.

"It is expected that an appeal will be launched."

Leon Crouch, who has had two spells as chairman of the football club, hit out at the "terrible timing" of the League's decision.

He told BBC Five Live Sport: "Southampton Leisure Holdings and Southampton Football Club are two separate companies.

"Mark Fry is the administrator for SLH, he's not the administrator for the club. We're not in administration, we're paying our bills and I don't see how they can take these points off us.

"Southampton Football Club was set up so that if this ever happened, we would not have these points deducted - it's the way they have interpreted the rules.

"I think we have a very strong case, I hope we appeal and we now have to focus on winning against Burnley on Saturday, we need to safeguard our Championship status and then hopefully have this decision overturned - then we'll be back where we belong next season."

Responding to Crouch on Five Live Sport, Football League chairman Lord Mawhinney said: "What he said that was of particular interest of me was when he said this structure was set up to avoid the football club having a penalty if it got into financial trouble.

Football League chairman Lord Mawhinney
The board is acting on sound legal advice, implementing the rules the clubs themselves wanted put in place

Football League chairman Lord Mawhinney

"We have looked carefully at the holding company's annual accounts, which include the football club, we sent forensic accountants into the company - not Football League staff, but people whose expertise is to get to the bottom of relationships between companies - and we have taken external legal advice.

"It's quite clear the holding company and the football club are inextricably linked as one economic entity.

"All of the evidence pointed us to the conclusion that an administrator has been appointed that covers the club or aspects of the club as well as the holding company, and that being the case, we had no flexibility under Football League regulations - we had to apply sporting sanctions.

"It's worth pointing out that those sporting sanctions were agreed by all the clubs. This is not a runaway decision - the board is acting on sound legal advice, implementing the rules the clubs themselves wanted put in place."

The 10-point deduction for Football League clubs entering administration was introduced in 2004, with Wrexham the first League team to suffer a deduction in the 2004/05 season.

In 2007, the rule was amended so that clubs going into administration after the fourth Thursday in March would have the 10-point deduction suspended, after Leeds United and Boston United both entered administration when they were all but relegated, just before the end of the 2006/07 season.

The 72 League clubs' chairmen unanimously backed the measure, so that if a club entering administration after the deadline escaped relegation, the 10 points would be deducted that season - but if they were relegated anyway, 10 points would be taken off the following season.

Mawhinney explained: "The clubs decided the sporting sanctions would have effect - so if a club was already going to be relegated, it ought not to get an advantage by going into administration and taking a 10-point hit when it was going to be relegated anyway."

He also hit back at claims that the club were not given enough notice, adding: "Towards the end of the process, the club withdrew its co-operation from the process, so we had to move to a conclusion one way or the other.

"Once the decision was made, the club were notified before any public statement was made."

Southampton are the fifth Football League team to be deducted points this season - Darlington entered administration, while Luton, Bournemouth and Rotherham were all penalised for coming out of administration without a Company Voluntary Agreement in place, as per the League's insolvency guidelines.

The punishment means Southampton are looking at life in English football's third tier for the first time in 50 years.

The 1976 FA Cup winners enjoyed a 27-year stay in the top flight before the club were relegated in 2005.

BBC South Today's Tony Husband added: "It's been a blame game for the last four years at Southampton since they were relegated from the Premier League, with different sets of directors blaming each other for the ills of the club.

"Former chairman Rupert Lowe is deeply unpopular with many supporters and will undoubtedly shoulder much of the blame, but it would be unfair to say this is a mess totally of his making.

"For 30 years, Southampton were held up as one of the most well-run, friendly and organised clubs, a small-town team punching above its weight by virtue of good management, but this is now a club on its knees - it's been a footballing catastrophe."



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see also
Delap sorrow at Saints situation
24 Apr 09 |  Stoke
Saints expect to avoid punishment
08 Apr 09 |  Southampton
Southampton await League inquiry
07 Apr 09 |  Southampton
Takeover interest for Southampton
06 Apr 09 |  Hampshire
Le Tissier offers to help Saints
03 Apr 09 |  Southampton
Southampton future 'in jeopardy'
02 Apr 09 |  Southampton
Southampton FC is priority - Lowe
01 Apr 09 |  Southampton
Saints expect 'substantial' loss
24 Jul 08 |  Southampton
Lowe completes Southampton return
15 May 08 |  Southampton
Crouch named new Saints chairman
20 Dec 07 |  Southampton
Southampton sack chairman Crouch
23 Jul 07 |  Southampton
League closes 10-point loophole
09 Jun 07 |  Football
Crouch is Saints acting chairman
02 Mar 07 |  Southampton
Saints chairman Lowe steps down
30 Jun 06 |  Southampton
Southampton 1-2 Man Utd
15 May 05 |  Premier League


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