trousers Posted 10 May, 2009 Share Posted 10 May, 2009 Many people have said that a company can't sell a 'future' commodity is it is in known financial straits (administration or otherwise). Can anyone actually post a link to the actual law in question so that I/we can see that there is actually a law that prevents 'Southampton Football Club Limited' (a company that is currently still a going concern, unlike the parent company) selling season tickets NOW for next season? I asked the question several weeks ago: "would people be prepared to waive their consumer rights to allow the club to sell season tickets" and most replies were "if it generates a cash flow that will get us through the summer and thus saves the club's bacon then, yes, of course I would buy a season ticket to keep the club alive". Surely any 'law' that exists which is preventing season ticket sales primarily exists to protect the consumer. But if the consumer in this case is prepared to own the risk rather than the retailer then why, oh why doesn't the club do something about it? If the law doesn't allow for consumer waiver of rights then the law is an ass. Which comes back to my original question to any lawyers out there. What is the exact wording of the law in this area? Thanks. Link to comment Share on other sites More sharing options...
beatlesaint Posted 10 May, 2009 Share Posted 10 May, 2009 Be very interested to see what the legal situation is yeah. I suppose the question at present would be who decides how much the season tickets will be ? Will possible new investors be happy with the pricing policy, some may say its too low, some may say its too high if trying to generate extra sales given we have been relegated. So it would be another factor to write into any possible bids i assume. Link to comment Share on other sites More sharing options...
lordswoodsaints Posted 10 May, 2009 Share Posted 10 May, 2009 I'm not sure if it is written in stone or not but I bet you would be upset if you shelled out your hard earned dollars on a season ticket and then the club went down the swanny after spunking it up the wall on paying the electricity bill,bogroll bill or euell's wages? Link to comment Share on other sites More sharing options...
Kadeem Hardison Posted 10 May, 2009 Share Posted 10 May, 2009 It's a really nice day outside today. Link to comment Share on other sites More sharing options...
kelkel31 Posted 10 May, 2009 Share Posted 10 May, 2009 i dont think it is anything to do with law, by selling tickets if the club was to fold we as 'season ticket holders' become creditors of the club, which means in any winding up order we would be part of the 'who gets what equation' this adds to the complexity's of the situation as well as the club not wanting to inflict any more unnecessary hardship on the supporters as we would be well down in the pecking order and would almost certainly not get a penny back. Link to comment Share on other sites More sharing options...
benjii Posted 10 May, 2009 Share Posted 10 May, 2009 I posted the same thing myself a few weeks ago. I don't think it is "illegal" to sell the tickets as things stand (although I have no idea if the Football League have some rule or other), however, whether any waiver of consumer rights would be binding if the club ultimately failed to fulfil its fixtures, I'm not sure. I suspect not. It's hard to see how this would be a problem for the company itself, as if it did fail to fulfil the fixtures then presumably it has gone under anyway and so the consumers would merely join the ranks of the unsecured creditors and any complaints would effectively fall on deaf ears. However, it is a different matter for a director to go ahead and authorise this if the solvency of the company is in doubt and I can understand why they wouldn't take the risk. (I believe the situation in our case may be further coplicated, as I'm not sure if ST income actually goes to SFC Ltd - my belief, based on sketchy details that have emerged, is that the original stadium finance structure ensured that ST income went to the stadium project vehicle. I believe the debt was later refinanced by Aviva so this may have changed.) Link to comment Share on other sites More sharing options...
Massimo Osti Posted 10 May, 2009 Share Posted 10 May, 2009 Surely if you bought one on your credit card you would be covered anyway??? Link to comment Share on other sites More sharing options...
aintforever Posted 10 May, 2009 Share Posted 10 May, 2009 Could it just be a case of the club wanting the Season Ticket money to go to the new owners rather than just be handed over to Barclays/Aviva? Link to comment Share on other sites More sharing options...
trousers Posted 10 May, 2009 Author Share Posted 10 May, 2009 I'm not sure if it is written in stone or not but I bet you would be upset if you shelled out your hard earned dollars on a season ticket and then the club went down the swanny Fair point. But what is ultimately more upsetting? Losing c.£300 (if the club went bankrupt even after throwing the season ticket sales dice) or seeing the club disappear because it didn't/couldn't sell season tickets in the first place? Link to comment Share on other sites More sharing options...
egreog Posted 10 May, 2009 Share Posted 10 May, 2009 (edited) Best keep your money in your own pocket, until the outcome of whether there is anything to buy a season ticket for!! Edited 11 May, 2009 by egreog Link to comment Share on other sites More sharing options...
70's Mike Posted 10 May, 2009 Share Posted 10 May, 2009 Best keep your money in your own pocket, until the outcome of whether there is anything to buy a seaon ticket for!! whilst i agree with your sentiments i also find it strange when we argue with the Football League that the club is NOT in administration , that it is SLH in trouble, why we cannot sell season tickets now or even stranger why if it is a separate business why we could not sell them back in March. Link to comment Share on other sites More sharing options...
Window Cleaner Posted 10 May, 2009 Share Posted 10 May, 2009 Well someone would have to decide on the price and since the "board" of the FC consists of Dave Jones and some obscure accountant the making of "commercial policy" might be a tricky matter. Imagine they sold tickets for say £320 and we ended up with a side similar to Eastleigh's or Salisbury's,would you think that was alright.Of course not and then the moaning,groaning and sniping would start all over again, not that it completely stopped mind you. Link to comment Share on other sites More sharing options...
70's Mike Posted 10 May, 2009 Share Posted 10 May, 2009 Well someone would have to decide on the price and since the "board" of the FC consists of Dave Jones and some obscure accountant the making of "commercial policy" might be a tricky matter. Imagine they sold tickets for say £320 and we ended up with a side similar to Eastleigh's or Salisbury's,would you think that was alright.Of course not and then the moaning,groaning and sniping would start all over again, not that it completely stopped mind you. same people who are deciding which players we are releasing? Link to comment Share on other sites More sharing options...
Window Cleaner Posted 10 May, 2009 Share Posted 10 May, 2009 same people who are deciding which players we are releasing? Ah no,that's anyone who's out of contract who Mark Wotte doesn't rate. All out of contract players have had to be released whether they get a new offer or not is to been seen later.But as we're not at end of contract day yet no definite action has to be taken . Link to comment Share on other sites More sharing options...
mattyd Posted 10 May, 2009 Share Posted 10 May, 2009 The Insolvency Act 1986 makes it illegal for a company to trade insolvently or acccept money from customers when they are aware of possible impending insolvency. This would be fraud as the directors are unsure whether they can honour the contract of supplying league football for the whole of next season. The directors would face possible company director disqualification action and/or criminal proceedings. Link to comment Share on other sites More sharing options...
Amesbury Saint Posted 10 May, 2009 Share Posted 10 May, 2009 why not start a registration scheme - collecting names and addresses of those who would like a season ticket Link to comment Share on other sites More sharing options...
Verbal Posted 10 May, 2009 Share Posted 10 May, 2009 The Insolvency Act 1986 makes it illegal for a company to trade insolvently or acccept money from customers when they are aware of possible impending insolvency. This would be fraud as the directors are unsure whether they can honour the contract of supplying league football for the whole of next season. The directors would face possible company director disqualification action and/or criminal proceedings. But who sells the season tickets? When the holding company fell into administration, Lowe/Wilde staked everything on arguing to the Football League that the club itself was still trading normally. If the club sells season tickets, then it's hard to see how the Insolvency Act applies. And if that's the case, why didn't they sell tickets earlier? Couldn't just be a question of how to price them - for the Championship or League One. Could it? It didn't stop Norwich, for example... Link to comment Share on other sites More sharing options...
lordswoodsaints Posted 10 May, 2009 Share Posted 10 May, 2009 Fair point. But what is ultimately more upsetting? Losing c.£300 (if the club went bankrupt even after throwing the season ticket sales dice) or seeing the club disappear because it didn't/couldn't sell season tickets in the first place? you are right it would be a sad day to see the club disappear for a relative small amount that could easily be provided by the sale of season tickets but the sale of season tickets is supposed to be for the club to prepare for the coming season not to pay for the previous one and this would be a disasterous move and would only delay the death of the club imo. Link to comment Share on other sites More sharing options...
benjii Posted 10 May, 2009 Share Posted 10 May, 2009 But who sells the season tickets? When the holding company fell into administration, Lowe/Wilde staked everything on arguing to the Football League that the club itself was still trading normally. If the club sells season tickets, then it's hard to see how the Insolvency Act applies. And if that's the case, why didn't they sell tickets earlier? Couldn't just be a question of how to price them - for the Championship or League One. Could it? It didn't stop Norwich, for example... That's the key question IMO. If: (a) Administration was a surprise (which it seems was the case from Lowe's reaction) then why on earth weren't we selling the tickets as early as usual? Because we couldn't be arsed to think of a price structure taking possible League One into account? Because we wanted to hold out to charge more for the Champ? If so, what another shocking piece of management. (b) Administration was known to be on the cards, then the fact that it happened only a few days after the league deadline is another damning indictment. Link to comment Share on other sites More sharing options...
Rational Rich Posted 10 May, 2009 Share Posted 10 May, 2009 The Insolvency Act 1986 makes it illegal for a company to trade insolvently or acccept money from customers when they are aware of possible impending insolvency. This would be fraud as the directors are unsure whether they can honour the contract of supplying league football for the whole of next season. The directors would face possible company director disqualification action and/or criminal proceedings. And could be personally liable for that aspect of the company's debt if it ever does get put into admin Link to comment Share on other sites More sharing options...
Rational Rich Posted 10 May, 2009 Share Posted 10 May, 2009 But who sells the season tickets? When the holding company fell into administration, Lowe/Wilde staked everything on arguing to the Football League that the club itself was still trading normally. If the club sells season tickets, then it's hard to see how the Insolvency Act applies. And if that's the case, why didn't they sell tickets earlier? Couldn't just be a question of how to price them - for the Championship or League One. Could it? It didn't stop Norwich, for example... It applies in the situation where there is a possibility of a company going under to stop directors incurring liabilities to creditors which they are unlikely to be able to satisfy when there is a strong possibility that their co will go under. Given that the holding co is in admin and the administrator has said the money will run out soon, you can see why jones and tointon (and before them lowe, wilde etc) have decided not to. Plus there's the commercial point about a new owner having their own ticketing strategy and wanting all of the funds for the future of the club (if SFCL went into admin that cash would go to the creditors). Link to comment Share on other sites More sharing options...
SaintRobbie Posted 10 May, 2009 Share Posted 10 May, 2009 it's a really nice day outside today. lol! Link to comment Share on other sites More sharing options...
RedAndWhite91 Posted 10 May, 2009 Share Posted 10 May, 2009 Sod the Insolvency Act! I want my season ticket!! Link to comment Share on other sites More sharing options...
ianthesaint Posted 10 May, 2009 Share Posted 10 May, 2009 Starting to take the **** a bit, in need of sorting these out asap some of us have other things with football for me its england Kazaksthan, Holland and Ukraine have taken a battering to my account with just enough but waiting around is really annoying.. Link to comment Share on other sites More sharing options...
Clapham Saint Posted 11 May, 2009 Share Posted 11 May, 2009 (edited) I don't have the exact wording of the legislation to hand, however when a company is insolvent (or of doubtful solvency as SFC Limited is should no buyer be found), its directors have a duty to consider the interests of creditors above those of shareholders. Under the Insolvency Act 1986, directors will be held personally liable for wrongful trading if a subsequently appointed liquidator can establish that, under the board’s direction, the company continued to trade and incurred credit when the board knew or should have known that there was no reasonable prospect that the company would avoid insolvent liquidation. The bit about "no reasonable prospect" is going to get some posters panicking and I can hear the "we're all doomed" cries already but please don't. Although I'm not at all ITK it is usual that directors (and the accountants and solicitors that advise them) will always look to avoid risk where ever possible. This generally means that if there is even a small chance of liquidation then deposits won't be taken "just in case" because the risk to the directors personally is not something that they are prepared to take on, even if the chances of them being liable are very very small. It could be argued that once they were confident that a deal was close to being done then they could take the deposits (the treatment of which could then be included somewhere in the sale agreement). However any purchaser would usually prefer to take the deposits themselves and use them as working capital and so there is no reason to take the deposits by that point. If a deal can't be done then the directors won't take deposits because they will be personally liable. If a deal can be done then the directors won't take deposits because the purchaser will want to take them themselves. Either way (and FWIW I think we are looking at the latter) season tickets won't be on sale until this is all resolved. EDIT: not sure how I *****ed up the font there... oops. Edited 11 May, 2009 by Clapham Saint Link to comment Share on other sites More sharing options...
Clapham Saint Posted 11 May, 2009 Share Posted 11 May, 2009 why not start a registration scheme - collecting names and addresses of those who would like a season ticket No reason not to take orders, just as long as they don't take the cash. Link to comment Share on other sites More sharing options...
trousers Posted 11 May, 2009 Author Share Posted 11 May, 2009 I accept that a company that is on the cusp of not being a going concern shouldn't start selling something it can't commit to, but, in the case of a football club, isn't the sale of season tickets the very bread and butter that keeps it solvent in the first place? If McDonalds stopped selling burgers I'm pretty sure they would soon go under, so what do they do? They keep selling burgers to ward off insolvency. To say that we can't sell our main commodity in case we can't fulfill the service we're selling is one of the biggest false ecconomies I've seen in a long time (IMHO of course). Link to comment Share on other sites More sharing options...
derry Posted 11 May, 2009 Share Posted 11 May, 2009 Clapham Saint summed it up nicely. Crouch explained the situation at a meeting I was at. It is the personally liable situation that stopped the season tickets being sold especially as the club knew that it's trading position is such, that it's debts of £6m and no assets, render it bankrupt. It is only the fact the creditors and the bank are holding off hoping for the whole concern to be sold and refinanced that is stopping them being wound up. The players are only an asset if they don't become free agents by not being paid. Link to comment Share on other sites More sharing options...
EastleighSoulBoy Posted 11 May, 2009 Share Posted 11 May, 2009 That's the key question IMO. If: (a) Administration was a surprise (which it seems was the case from Lowe's reaction) then why on earth weren't we selling the tickets as early as usual? Because we couldn't be arsed to think of a price structure taking possible League One into account? Because we wanted to hold out to charge more for the Champ? If so, what another shocking piece of management. (b) Administration was known to be on the cards, then the fact that it happened only a few days after the league deadline is another damning indictment. And that, your honour, sums up the case for the prosecution. Spot on! Link to comment Share on other sites More sharing options...
sandwichsaint Posted 11 May, 2009 Share Posted 11 May, 2009 Wotte's to stop the club selling pieces of paper for £300 that read; 'This piece of paper is worthless, but in the event of Southampton FC being in a position to sell season tickets for season 2008-09 the bearer shall be entitled to a refund of (£325) on the face value of said season tickets' With suitable small print that places the liability entirely on the buyer as to the fact that the 'bond' carries no consumer rights or guarantees. Got to be better than bucket collections surely? Link to comment Share on other sites More sharing options...
mattyd Posted 11 May, 2009 Share Posted 11 May, 2009 If SFC is projected to become insolvent then the rules do apply. Directors have to be sure the company is a going concern for the whole duration of the contract (i.e. the season) or they are breaking the law. The answer would be to put the money in a holding account and sell the tickets. This would be ringfenced should the company fail. However, they still could not use the cash until the future is clear Link to comment Share on other sites More sharing options...
hypochondriac Posted 11 May, 2009 Share Posted 11 May, 2009 I accept that a company that is on the cusp of not being a going concern shouldn't start selling something it can't commit to, but, in the case of a football club, isn't the sale of season tickets the very bread and butter that keeps it solvent in the first place? If McDonalds stopped selling burgers I'm pretty sure they would soon go under, so what do they do? They keep selling burgers to ward off insolvency. To say that we can't sell our main commodity in case we can't fulfill the service we're selling is one of the biggest false ecconomies I've seen in a long time (IMHO of course). We would still sell match day tickets but how can you sell a season ticket promising a load of games in the future if there's a reasonable chance that we won't be around for them. Link to comment Share on other sites More sharing options...
Charlie Wayman Posted 11 May, 2009 Share Posted 11 May, 2009 Many people have said that a company can't sell a 'future' commodity is it is in known financial straits (administration or otherwise). Can anyone actually post a link to the actual law in question so that I/we can see that there is actually a law that prevents 'Southampton Football Club Limited' (a company that is currently still a going concern, unlike the parent company) selling season tickets NOW for next season? I asked the question several weeks ago: "would people be prepared to waive their consumer rights to allow the club to sell season tickets" and most replies were "if it generates a cash flow that will get us through the summer and thus saves the club's bacon then, yes, of course I would buy a season ticket to keep the club alive". Surely any 'law' that exists which is preventing season ticket sales primarily exists to protect the consumer. But if the consumer in this case is prepared to own the risk rather than the retailer then why, oh why doesn't the club do something about it? If the law doesn't allow for consumer waiver of rights then the law is an ass. Which comes back to my original question to any lawyers out there. What is the exact wording of the law in this area? Thanks. "You Cannot be Serious!" Surely nobody is stupid enough to want to part with their money whilst teh club is teetering on the brink of bankruptcy? If you've that much dosh to sprinkle around why not give it to some well meaning cause instead of greedy bastards spoilt brat ball kickers. Link to comment Share on other sites More sharing options...
trousers Posted 11 May, 2009 Author Share Posted 11 May, 2009 "You Cannot be Serious!" Surely nobody is stupid enough to want to part with their money whilst teh club is teetering on the brink of bankruptcy? If you've that much dosh to sprinkle around why not give it to some well meaning cause instead of greedy bastards spoilt brat ball kickers. Fair point. I hereby consign my suggestion to the pile marked 'naive' Link to comment Share on other sites More sharing options...
Fan In The Stand Posted 11 May, 2009 Share Posted 11 May, 2009 Starting to take the **** a bit, in need of sorting these out asap some of us have other things with football for me its england Kazaksthan, Holland and Ukraine have taken a battering to my account with just enough but waiting around is really annoying.. I'm glad I won't be the only one representing SFC in Kazakhstan! Link to comment Share on other sites More sharing options...
ianthesaint Posted 12 May, 2009 Share Posted 12 May, 2009 I'm glad I won't be the only one representing SFC in Kazakhstan! Cant pm you mate but whats your email address mate? what route u doing? Link to comment Share on other sites More sharing options...
SaintBobby Posted 12 May, 2009 Share Posted 12 May, 2009 It strikes me it's actually a business decision, rather than a legal one. If Saints can sell tickets for the All-Star game on May 17th and make explicit that these are being kept in a separate bank account with refundability (which they are), I don't see any serious legal reason why this couldn't be done for season tickets. My guess is that the position is so precarious and unpredictable - and the intentions of any new putative owners so impossible to second guess - that a serious business plan is needed before pricing up tickets. To take three extreme examples: 1. Trillionaire buys the club and wants to reward loyal fans.... 'early bird' renewal is £50. 2. Club is just kept afloat at St. Mary's, Chapel and Kingsland stands closed to cut cost. Cash desperately needed in reduced capacity ground of 15,000...renewal price is £200. 3. New owners hand over the keys to St. Mary's stadium back to Aviva and relocate to Eastleigh's Silverlake Stadium (capacity 3,000)....limited tickets available at £450 each. Not saying, btw, that any of these things will come close to happening, but the variance is enormous even within a range of more plausible outcomes. Link to comment Share on other sites More sharing options...
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