Championship doomsday scenario?

[danblakemore]

obviously pales into insignificance in current climate, but it seems the championship bosses might be planning a "doomsday " scenario.

 

Don't know how it would work though? 

 

 

[@owlstalk]

The plan would involve all 24 teams - including Stoke City - agreeing to go into administration, with owners then being able to buy the clubs back before they negotiate new contracts

Championship clubs are reportedly looking at the possibility of “group administration”.

 

The Daily Mail claim second tier chiefs are considering what they are calling “the nuclear option” amid the fallout from the coronavirus crisis.

That would involve all 24 teams - including Stoke City - agreeing to go into administration, with owners then being able to buy the clubs back before they negotiate new contracts.

 

However, the Mail adds “there would be legal implications and it would require huge trust from all teams”.

The report states: “Owners and chief executives in the second tier of English football have had conversations about a process known as group administration, the last desperate act to avoid ruin, if no common ground can be found.

 

“It would need the agreement of all 24 clubs and require an enormous amount of trust from all sides, but it would change the face of the English game long beyond the coronavirus pandemic.

 

“Group administration would involve every Championship club being placed into administration on the same day. Staff would be temporarily let go. Entire playing staffs would become free agents.

“Each owner would then buy the club back and negotiate contracts anew. It would be a doomsday scenario, a recalibration of the entire football industry.”

 

The Mail say it is an idea which has been discussed amid the ongoing row over possible wage cuts for players, as clubs look to cope with the financial implications of the COVID-19 outbreak.

They claim English Football League chairman Rick Parry is aware of the discussions which “should serve as a distress signal that clubs face financial disaster”.

 

The report says the current penalties for teams entering administration would need to be waived and agreements would need to be reached around not poaching players - but Championship clubs “have discussed a binding agreement between the members of that league at least”.

 

It is said sides would then be bought back from administration by the same owners and staff re-employed, with future salary cap rules also part of the discussion.

The Mail outline a number of potential legal consequences which would result, as well as the fact clubs would have to reapply to join the Football League.

 

They say: “What it does, then, is reveal the growing gulf between elements of the game; the resentment, the distrust and the panic that the coronavirus has wrought.

 

“Without doubt, there are owners who fear their club could fold unless running costs are swiftly addressed; without doubt, their greatest expense will be player wages.”

 

And they add: “So the talks around group administration are almost a scorched earth policy. If the clubs are going down, it all burns with them.”

 

[@owlstalk]

 

 

Absolutely incredible if true...

[sage owl]

Wow 

[soldierboyblue]

39 minutes ago, @owlstalk said:

 

 

Absolutely incredible if true...

Absolutely against the law also

[Musn't Grumble]

Highly doubtful that this a serious way forward.

 

For a start, if all 24 clubs go into administration, who is to say that the administrator in each instance will sell the club back to the same owner? Or even sell the club as a going concern instead of breaking up the assets?

[soldierboyblue]

15 minutes ago, Musn't Grumble said:

Highly doubtful that this a serious way forward.

 

For a start, if all 24 clubs go into administration, who is to say that the administrator in each instance will sell the club back to the same owner? Or even sell the club as a going concern instead of breaking up the assets?

It’s illegal and here’s some snippets of what it means practically

 

How administration works

The administrator will write to your creditors and Companies House to say they’ve been appointed - they’ll also publish a notice of their appointment in The Gazette.

Your administrator will try to stop your company being wound up(‘liquidated’). If they can’t, they will try to pay as much of your company’s debts as possible from the company’s assets.

Your administrator has 8 weeks to write a statement explaining what they plan to do.

They must send a copy to creditors, employees and Companies House and invite them to approve or amend the plans at a meeting.

The administrator could decide to:

• negotiate a Company Voluntary Arrangement (CVA) so your company can keep trading
• sell your business as a ‘going concern’ to another company - meaning your business can carry on, eg by keeping its clients, workforce or orders
• sell your assets as part of a creditors’ voluntary liquidation, pay your creditors from any money raised and close your company
• close your company if there’s nothing to sell

For as long as the company is in administration your administrator will run your business.

The administrator has control over your business during administration, eg they can cancel or renegotiate any contracts you have or make employees redundant.

When administration ends

Your company’s administration will end when either:

• the administrator decides the purpose of administration has been achieved, eg a CVA has been agreed with the creditors
• the administrator’s contract ends - this happens automatically after a year, but it can be renewed

You won’t have protection against any legal action your creditors take once administration has ended.

[Dick_Turpin]

24 minutes ago, Musn't Grumble said:

Highly doubtful that this a serious way forward.

 

For a start, if all 24 clubs go into administration, who is to say that the administrator in each instance will sell the club back to the same owner? Or even sell the club as a going concern instead of breaking up the assets?

“Pre-pack” insolvencies are very common. Quick and easy way to restructure. 
 

https://www.realbusinessrescue.co.uk/pre-pack-administration/process-and-procedure

 

 

[northeastowl]

Wouldn’t happen but would be a good way to ship out all our poo and tell Paxaio to fizz off then start again.

[toppOwl]

Whatever happens I hope the EFL have absolutely nothing to do with football ever again, as bad as this crisis is it could be year zero.

[striker]

Seems like a lot of complicated restructuring to facilitate re negotiation of players contracts. 

 

Or are the clubs planning to shaft suppliers and non playing staff as part of the administration process?

 

The EFL love making new rules up, why just not a moratorium on players contracts. Give the current club first option to re sign a player. 

 

[Dick_Turpin]

44 minutes ago, toppOwl said:

Whatever happens I hope the EFL have absolutely nothing to do with football ever again, as bad as this crisis is it could be year zero.

Given the EFL is effectively the clubs that’s a tricky one. 

[kobayashi]

41 minutes ago, striker said:

Seems like a lot of complicated restructuring to facilitate re negotiation of players contracts. 

 

Or are the clubs planning to shaft suppliers and non playing staff as part of the administration process?

 

The EFL love making new rules up, why just not a moratorium on players contracts. Give the current club first option to re sign a player. 

 

Or those “fan creditors”that have bought into Chansiri’s various multi year deals or just have a ST for the remainder of 19/20 and/or 20/21.

[S36 OWL]

3 hours ago, @owlstalk said:

 

 

Absolutely incredible if true...

 

But maybe a good thing if it allows the championship to hit the reset button and start again with a salary cap , which should see the current stupidity of paying players obscene amount of money stop . 

[nevthelodgemoorowl]

Yeah could turn the clock back to the 1880's Amateur Footballers earning a living as Jaquered Loom weavers making woolly shirts for the Football world. £3-15-3d a week with a turkey at Christmas and Easter. A massive lesson in humility 

[Maddogbob]

They need to realise the gravy train has been turned off. 

 

Football will have to change. That includes the epl. 

[Holmowl]

Many industries and sectors will need defibrillation when we are finally out of this worldwide catastrophe. Football is not exempt. 

 

Would not surprise me in the least if this or something similar is done.

[Guest]

7 hours ago, kobayashi said:

Or those “fan creditors”that have bought into Chansiri’s various multi year deals or just have a ST for the remainder of 19/20 and/or 20/21.

If their deals were honoured - would they be classed as preferential creditors? (Which is against the law)

[torres]

6 hours ago, TINKERBELL said:

Too right. Money is obscene what players are paid. 

 

NHS staff should be on top money. 

 

Football is a game 

 

NHS save lives and bring new 1s  into life 

I hope you understand why this is so and your response is a bit childish 

[Pablo Bonvin]

All 24 clubs have to agree. One of them is run by Gibson. So, it won't happen.

 

Not that it should either by the way.