Portsmouth Parachute Payments

[waddleisgod]

why not though?

every single relegated club is entitled to parachute payments - that's how the parachute payments system works.

The only thing I take issue with, is where that money goes. As they are entered into administration, I would expect that money to be made available to creditors.

I think you are talking exceptional circumstances. I honestly don't know enough about it, but believe it something to do with football debts etc rather than business debts. I know Luton got absolutely arse raped, I can't remember why though.

Same with Leeds - they had a further points deduction (I think? I'm not certain) because they hadn't settled their football debts in time to receive their 'golden share' which entitled them to play in the football league. I think because they were granted that 'golden share' under exceptional circumstances, they then faced a further points deduction.

Someone else will be able to explain better than me though.

cheers

i can live with them getting the payment as long as it ONLY goes towards bad debt and not towards rebuilding the squad for promotion back to the prem.

i'm same as you, many have had points deducted from the current season going in to admin but have also had points deducted from the next season too,

i've tried to find out why and it is explained clearly but i can't find anything that makes it clear, not sure its as simple as a date deadline for points deduction

teams i can think of in the last few years that have had points deducted twice are,

Leeds

Rotherham

Luton

Chester

but why

and why MIGHT Pompey get away with it?

[Brownlad]

cheers

i can live with them getting the payment as long as it ONLY goes towards bad debt and not towards rebuilding the squad for promotion back to the prem.

i'm same as you, many have had points deducted from the current season going in to admin but have also had points deducted from the next season too,

i've tried to find out why and is explained clearly but i can't, not sure its as simple as a date deadline for points deduction

teams i can think of in the last few years that have had points deducted twice are,

Leeds

Rotherham

Luton

Chester

but why

and why MIGHT Pompey get away with it?

like I said mate, I'm not sure, but I believe there is a point in the summer where the past season has officially ended, and the new season officially begins.

I believe that the initial 10 point penalty is applied to a club when they enter administration - if they have not come out of administration, or resolved their football debts etc by the time the next season officially begins (which is before their first match) then I believe that are not given their share which entitles them to take part in the league and therefore, they have to apply to recieve it under exceptional circumstances - this incurs another penalty.

Like I said though, I might be wrong about that. Anyone else able to word it better / correctly?

[Guest ArbourOwl]

like I said mate, I'm not sure, but I believe there is a point in the summer where the past season has officially ended, and the new season officially begins.

I believe that the initial 10 point penalty is applied to a club when they enter administration - if they have not come out of administration, or resolved their football debts etc by the time the next season officially begins (which is before their first match) then I believe that are not given their share which entitles them to take part in the league and therefore, they have to apply to recieve it under exceptional circumstances - this incurs another penalty.

Like I said though, I might be wrong about that. Anyone else able to word it better / correctly?

You get more points taken off for not agreeing a CVA with your creditor's. If you agree a CVA then you get your golden share and continue from zero points next season. Thats my understanding anyway... Edited February 26, 2010 by ArbourOwl

[Brownlad]

You get more points taken off for not agreeing a CVA with your creditor's. If you agree a CVA then you get your golden share and continue from zero points next season.

so it is dependent on whether you have come out of administration or not? I.e. entering into a CVA?

[Guest ArbourOwl]

so it is dependent on whether you have come out of administration or not? I.e. entering into a CVA?

Yeah. Im just going on what happened to LeedS a few years ago. They failed to agree a CVA with creditors this meaning they failed to come out of admin. So the league refused them their golden share, Too which Leeds applied for exceptional circumstances and took the 15 point dedution after finally agreeing the CVA. The only way to come out of admin is by agreeing a CVA.

[waddleisgod]

i'm sure i've seen that if you enter admin and are relegated, and you would still have been relegated even without the points deduction, then points are again deducted the following season

reason being that the first set of points deducted had zero impact = no punishment.

this stops clubs going in to admin as a cost saving excersie when they know they are going down and take the hit then rather than later

Edited February 26, 2010 by waddleisgod

[Brownlad]

i'm sure i've seen that if you enter admin and are relegated, and you would still have been relegated even without the points deduction, then points are again deducted the following season

reason being that the first set of points deducted had zero impact = no punishment.

this stops clubs going in to admin as a cost saving excersie when they jnow they are going down and take the hit

no, i think it's something to with dates. Not two lots of ten points.

I think if you enter administration after march or something, they come off the following season, to prevent clubs doing what Leeds did i.e. in their final game, realised they were going down and entered administration, thus incurring a 10 point deduction there and then, meaning they could start in League one with a clean slate.

[waddleisgod]

no, i think it's something to with dates. Not two lots of ten points.

I think if you enter administration after march or something, they come off the following season, to prevent clubs doing what Leeds did i.e. in their final game, realised they were going down and entered administration, thus incurring a 10 point deduction there and then, meaning they could start in League one with a clean slate.

you may well be right mate

[Dizzys Dad]

How did the football authorities manage to get preference, for football related debts, over debts to the Inland Revenue?

This doesn`t apply in any other business as far as I know.

If , for example, a Butcher went bust, he`d have to pay the taxman before his wholesaler, wouldn`t he?

[waddleisgod]

How did the football authorities manage to get preference, for football related debts, over debts to the Inland Revenue?

This doesn`t apply in any other business as far as I know.

If , for example, a Butcher went bust, he`d have to pay the taxman before his wholesaler, wouldn`t he?

that was before admin though i think

but you are right, creditors like HMRC and anyone like the bank who may have a debenture on the company come first in the queue

Edited February 26, 2010 by waddleisgod

[MotherGoose]

How did the football authorities manage to get preference, for football related debts, over debts to the Inland Revenue?

This doesn`t apply in any other business as far as I know.

If , for example, a Butcher went bust, he`d have to pay the taxman before his wholesaler, wouldn`t he?

I don't think it's a point of law - more that it's part of the league rules.

If you want to keep your 'share' in the football league / PL / whatever you have to agree to pay your football debts in full - it's a protection for the selling clubs. That was my understanding

Why the the revenue don't just laugh at that and say we're first is beyond me..

[NicNac]

no, i think it's something to with dates. Not two lots of ten points.

I think if you enter administration after march or something, they come off the following season, to prevent clubs doing what Leeds did i.e. in their final game, realised they were going down and entered administration, thus incurring a 10 point deduction there and then, meaning they could start in League one with a clean slate.

I think what waddle said is how it used to be, then they clarified to the above after the Leeds debacle.

[torryowl]

should do what they do over here in spain,if a club cant pay there way and honour there debts they get relegated to regional football league and cannot come back until the debt is paid off . happened to bigger clubs than pompey, real oviedo and c d logrones are 2 cases in the last few years and numerous lower divison sides have just dissapeared.

[Big Fish]

Estimated they owe £18m to the tax man, total debts = £70m therefore just over the 25% threshold.

Also cannot see Gadaymak accepting a reduced settlement, fortunately he still owns the stadium

Portsmouth FC had a fans forum on radio 5 live earlier in the week. According to that programme the football club owns the stadium but Gadaymak owns the surrounding land - which means that anyone wishing to redevelop the stadium to increase the capacity for example has to negtoaite with him. This is why, in the opinion of Steve Claridge, no (serious) investers were interested in the club. Reading between the lines then, the stadium is effetively worthless.

[darra]

I read an article in one of the broadsheets the other day that said HMRC had had enough of football clubs not paying their taxes. That's why HMRC have hit Portsmouth with a winding up order.

I'm no expert, but i understand that going into Administration is a defence against a winding up order, but only if the company is viable. I don't think Portsmouth FC is viable.

They've already been in Administration once (in 1998), that's why I think HMRC will go for the "nuclear option" to make sure they can't keep going bust owing £ millions in unpaid tax.

Heard the other day the reason the HMRC are playing hard ball and trying to get clubs wound up is because of the preferential creditors rating for players,basically when a club goes into admin the players are guaranteed to get paid in full. All other creditors HMRC included then have to join the queue to get paid whats left. In the case of Portsmouth around £1.1 million of the 11 owed.[

That's why HMRC are peed off

Edited February 26, 2010 by darra