A game flushed with riches should find way to save Southampton

[buctootim]

http://www.guardian.co.uk/football/blog/2009/apr/28/southampton-championship-relegation-administration

[JustMike]

very good article imo. Kinda sums football and saints up really.

[alpine_saint]

Great article.

 

Some one mail it to that c**t Richard Scudamore.

[SFC Forever]

Apt

[Fitzhugh Fella]

Excellent article. Growing up in a house in Archers Road midway between the County Ground and The Dell I know where he is coming from.

 

The Guardian is full of Saints stories today - there are some allegations that a Leon Crouch interview on R5 gave the game away re the club and the PLC being linked.

[WealdSaint]

Good article

[ART]

Here is the article Duncan referred

http://www.guardian.co.uk/football/2009/apr/28/southampton-championship-digger

[Frank's cousin]

Thats a great artical and a great philosophy, sadly missing from todays game...

[eurosaint]

Here is the article Duncan referred to with the link

 

Football braced for Southampton replayDigg it Matt Scott The Guardian, Tuesday 28 April 2009 Article history

Southampton were deducted 10 points last week due to their financial difficulties. Photograph: Daniel Hambury/EMPICS Sport/PA Photos

 

The situation at Southampton, whose parent company went into admini- stration, could be repeated elsewhere, according to banking sources.

 

Southampton Leisure Holdings' collapse came after Barclays demanded more investment in the club as a prerequisite of extending its overdraft. But shareholders were unable to provide those funds, prompting the bank's decision to foreclose. That came as a surprise since as the Premier League's title sponsor its commitment to football is higher-profile than any other bank's. But Barclays is not alone among lenders who consider the days of unsecured debt finance for football to be over.

 

The annual rich list reflected that club owners are watching their wealth plunge, and banks' demands for fresh investment are expected to cause problems. "Banks are looking at [shareholder] investment levels," said a source. "Investment was a key issue for Southampton and will be a greater issue going forward. Other clubs may look for support [from the banks] but there could be an issue if they cannot also invest their own funds." There has been speculation the Royal Bank of Scotland and Wachovia, whose £350.5m loan to Liverpool must be refinanced in July, made clear during meetings last week with the owners, George Gillett and Tom Hicks, that they would require fresh investment to extend the credit line.

 

Crouch's penalty

 

 

Leon Crouch, the former Southampton chairman, may not have helped the club's hopes of appealing the 10-point penalty imposed for its holding company going into administration. The Football League is understood to have seized upon Crouch's admission, during a Radio Five debate, that: "Southampton FC was set up in such a way [that], if this ever happened, we would not have those points deducted." The league believes the confession that the ownership structure was designed to exploit a perceived loophole in its rulebook will provide weight to its assertion that the club and its parent company are "inextricably linked as one economic entity". Southampton's administrators will appeal the penalty.

 

http://www.guardian.co.uk/football/2009/apr/28/southampton-championship-digger

 

I must admit that when I heard him say that live at the time I was mortified !

The fact is that SLH was the PLC holding company for 13 years and surely Rupert had no idea then that it would be relevant to the situation today !

He was just an idiot and didn't think before he spoke !!

[Wes Tender]

Leon Crouch, the former Southampton chairman, may not have helped the club's hopes of appealing the 10-point penalty imposed for its holding company going into administration. The Football League is understood to have seized upon Crouch's admission, during a Radio Five debate, that: "Southampton FC was set up in such a way [that], if this ever happened, we would not have those points deducted." The league believes the confession that the ownership structure was designed to exploit a perceived loophole in its rulebook will provide weight to its assertion that the club and its parent company are "inextricably linked as one economic entity". Southampton's administrators will appeal the penalty.

 

http://www.guardian.co.uk/football/2009/apr/28/southampton-championship-digger

 

Crouch's quote does not conclusively give the FL evidence at all that he has admitted that the club was deliberately set up to avoid the 10 point penalty in the event of us going into administration.

 

What he has stated is merely a correct summary of the facts. All he is doing is reiterating that because of the loophole that the FL stupidly and naively allowed to exist, that we should not be docked the points. And neither should we.

 

I understand that Derby got away with it and that the FL therefore should have had the intelligence to act after that to close the loophole. If they don't and we are penalised, I fully expect them to apply the same punishment on West Ham. Let's see them survive in the Premiership next season starting with -10.

[dubai_phil]

Here is the article Duncan referred to with the link

 

Football braced for Southampton replayDigg it Matt Scott The Guardian, Tuesday 28 April 2009 Article history

Southampton were deducted 10 points last week due to their financial difficulties. Photograph: Daniel Hambury/EMPICS Sport/PA Photos

 

The situation at Southampton, whose parent company went into admini- stration, could be repeated elsewhere, according to banking sources.

 

Southampton Leisure Holdings' collapse came after Barclays demanded more investment in the club as a prerequisite of extending its overdraft. But shareholders were unable to provide those funds, prompting the bank's decision to foreclose. That came as a surprise since as the Premier League's title sponsor its commitment to football is higher-profile than any other bank's. But Barclays is not alone among lenders who consider the days of unsecured debt finance for football to be over.

 

The annual rich list reflected that club owners are watching their wealth plunge, and banks' demands for fresh investment are expected to cause problems. "Banks are looking at [shareholder] investment levels," said a source. "Investment was a key issue for Southampton and will be a greater issue going forward. Other clubs may look for support [from the banks] but there could be an issue if they cannot also invest their own funds." There has been speculation the Royal Bank of Scotland and Wachovia, whose £350.5m loan to Liverpool must be refinanced in July, made clear during meetings last week with the owners, George Gillett and Tom Hicks, that they would require fresh investment to extend the credit line.

 

Crouch's penalty

 

 

Leon Crouch, the former Southampton chairman, may not have helped the club's hopes of appealing the 10-point penalty imposed for its holding company going into administration. The Football League is understood to have seized upon Crouch's admission, during a Radio Five debate, that: "Southampton FC was set up in such a way [that], if this ever happened, we would not have those points deducted." The league believes the confession that the ownership structure was designed to exploit a perceived loophole in its rulebook will provide weight to its assertion that the club and its parent company are "inextricably linked as one economic entity". Southampton's administrators will appeal the penalty.

 

http://www.guardian.co.uk/football/2009/apr/28/southampton-championship-digger

 

A great many people involved in football will be watching the Liverpool situation very closely. While the club is profitable, the way that they were bought using a leveraged takeover means that huge sums of money were borrowed on fixed term deals "in the good times"

 

The massive issue now must be that nobody will want to take on those loans and re-finance them in the "new world". Even IF re-finance is found, the lenders will expect a lot higher return. The interest at Liverpool on the OLD finance deals equalled their annual profits according to some reports.

 

Using my neck of the woods as an example, Dubai related businesses borrowed heavily in "Eurobonds" to fund the massive growth in property speculation. Those funds are no longer there, but Dubai needs to repay many of those bonds each year. Before they could "roll them over" but today everyone wants their money back. It is estimated that the debt here is now $112billion, which is about $100million for every passport holder.

 

Sovereign wealth funds will have to address the issues in their own back yards over the next 12-24 months of making sure those bonds are all rolled over and the actual construction phase is completed. They'll still have the problem of SELLING the places but the whole issue is that CAPITAL that could have been used is vanishing.

 

Taking out the Lowe effect for a moment. the simple issue with Southampton today is that they were under-capitalized and reliant on debt. MANY other clubs are in the same boat. Many more could follow

 

Saints v Liverpool in the Blue Square isn't that likely, but Hicks & Gillet have problems looming

[madsent]

Crouch's quote does not conclusively give the FL evidence at all that he has admitted that the club was deliberately set up to avoid the 10 point penalty in the event of us going into administration.

 

What he has stated is merely a correct summary of the facts. All he is doing is reiterating that because of the loophole that the FL stupidly and naively allowed to exist, that we should not be docked the points. And neither should we.

 

I understand that Derby got away with it and that the FL therefore should have had the intelligence to act after that to close the loophole. If they don't and we are penalised, I fully expect them to apply the same punishment on West Ham. Let's see them survive in the Premiership next season starting with -10.

 

Hansa, West Ham's holding company, is in a bad way but is not in administration yet. All the headlines were about Hansa (the holding company) beginning the process of going into administration. That said, should Hansa go into administration, West Ham wouldn't suffer any consequences since it is a foreign company and the rules wouldn't apply. It is a moot point anyway since West Ham are in the Premier League and are not governed by the Football League. There is no points penalty as yet for Premier League clubs entering administration.

[eurosaint]

Crouch's quote does not conclusively give the FL evidence at all that he has admitted that the club was deliberately set up to avoid the 10 point penalty in the event of us going into administration.

 

What he has stated is merely a correct summary of the facts. All he is doing is reiterating that because of the loophole that the FL stupidly and naively allowed to exist, that we should not be docked the points. And neither should we.

 

I understand that Derby got away with it and that the FL therefore should have had the intelligence to act after that to close the loophole. If they don't and we are penalised, I fully expect them to apply the same punishment on West Ham. Let's see them survive in the Premiership next season starting with -10.

 

I agree Wes that is was not conclusive but it certainly was damaging ! He is a recent former chairman and if you give the FL authorities half a chance then they will exploit it (as they probably already have) !

WHU are under different jurisdiction (PL) but the situation is similar and it does seem contradictory that we are punished and they are not, particularly given their other recent shenanigans !!

[Wes Tender]

I agree Wes that is was not conclusive but it certainly was damaging ! He is a recent former chairman and if you give the FL authorities half a chance then they will exploit it (as they probably already have) !

WHU are under different jurisdiction (PL) but the situation is similar and it does seem contradictory that we are punished and they are not, particularly given their other recent shenanigans !!

 

I completely agree that the situation is farcical that a different situation should arise dependent on whether a) the holding company is British or foreign or b) the matter involves a Championship side or a Premier league club.

 

Presumably there are also different rules if a club is in other divisions too.

 

The matter of ownership ought to be a complete irrelevance, or there will be scope to have the parent holding company registered overseas, or even in an offshore tax haven like Jersey. Ditto one set of rules for the Premiership and another for the lower divisions is tantamount to one law for the rich and another for the poor. Bloody hypocrites, the entire hierarchy that governs football.

[SW11_Saint]

An excellent article. The Guardian seems to be the only national taking note of our plight. Sadly, I don't expect the rest of football to take notice...

 

Actually, I was interested in this line in his article "Until someone proves otherwise, we are obliged to suspect c_ck-up rather than conspiracy."... as the day before there was the following line in the match report in the Guardian, by Jeremy Alexander (link below), which made me sit up and take notice - "Another FA investigation may discover where a reported £40m went missing." Could be just an oblique reference to us squandering tens of millions of transfer income, but I'm starting to wonder - has The Guardian got a whiff of something less than honest going on at SMS?

 

http://www.guardian.co.uk/football/2009/apr/27/southampton-burnley-championship-relegation

 

I know I've always tried to fathom how with our gate receipts (from fairly decent attendences), the transfer money, commercial income etc. we've ended up SO deep in trouble. Obviously £40m is a heck of a figure to hide under the carpet, but it did get me thinking...

[Lets B Avenue]

Crouch's quote does not conclusively give the FL evidence at all that he has admitted that the club was deliberately set up to avoid the 10 point penalty in the event of us going into administration.

 

What he has stated is merely a correct summary of the facts. All he is doing is reiterating that because of the loophole that the FL stupidly and naively allowed to exist, that we should not be docked the points. And neither should we.

 

I understand that Derby got away with it and that the FL therefore should have had the intelligence to act after that to close the loophole. If they don't and we are penalised, I fully expect them to apply the same punishment on West Ham. Let's see them survive in the Premiership next season starting with -10.

 

Crouch's interview on 5Live was on Thursday, after the 10 point deduction was imposed.

 

As for Derby, may I be the 95th poster to point out that they didn't "get away" with the penalty as it didnt exist at that time.

[Legod Third Coming]

Ah - found a link, excellent article I thought.