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“We are urging the Board of Coventry City Football Club to ensure that any potential offers placed before them do not include placing the club into administration. Some supporters may be under the misguided impression that going into administration would be the best thing for the Club, but they are not properly considering the consequences. “The minimum deduction of ten points that administration would bring would move the club from playoff challengers to relegation possibilities and lower morale amongst players, management, supporters, and employees across the club. It would also damage our reputation in the local community and crucially with local businesses." Frequently Asked Questions:
What would happen if Coventry City Football Club went into administration? The club would receive an automatic ten points deduction, which would obviously adversely affect the season. In fact, with the club currently poised just a point outside the playoffs, it would turn us into relegation candidates overnight. But we could appeal against any deduction, couldn’t we? Yes, we could. But the chances of a successful appeal are almost non-existent – just ask Wrexham – not forgetting the non-returnable deposit that has to be lodged in the event. But it would clear our debts, wouldn’t it? No. Under rules implemented across football, all clubs must pay off 100% of their football debts (the so-called ‘Football Creditor’ rule, which includes players (though not managers), other football clubs, the Professional Footballers' Association and the League etc. And this is even before ‘preferential’ creditors, as required by law – for example the Her Majesty’s Revenue and Customs (HMRC). How does the Inland Revenue fit into the picture? Since several unsuccessful legal challenges against the Football Creditor rule by HMRC which upheld the status quo, they have lost its right to be paid out before other creditors. They now have to wait with the rest of the crowd for what is left after the other creditors (as above) have taken their slice. What would happen to local businesses? The other people who could potentially lose out if the club went into administration are local businesses who supply goods and services to the football club; in many instances when the football club has gone into administration this has had a detrimental effect on the local business community. The requirement also prevents one club's financial difficulties impacting upon other clubs and generally encourages clubs to meet all of their creditors in full on an ongoing basis. |
