Financial balls, but just what is administration?

By Christopher Hall

Dundee are in it, Liverpool just might be going into it and a number of other football clubs are cautiously striving to avoid it. But just what are the key factors of the phenomenon which is flaunted cautiously in board rooms of football clubs around the United Kingdom?

Administration.

The key points of this are not as complicated as one may think. The main reason for a club going into administration might be viewed by many fans as an utterly dark portion of a club’s existence, with chances of survival bleak. Many clubs, however, have been in and out of administration just as quickly throughout the years and to understand the fundamentals of the process would shed light on a truly fascinating phenomenon of modern football.

In simple terms it should be seen as a misdirection of the clubs finances. The common admission of problems, similiar to that of Dundee who recently published a bill of £365,000, is pressure from the tax man. The club then were revealed to have overall debts of around 2 million pounds and the administration proceedings were uncovered.

The next stage of the journey involves the appointment of the “administrator” who will oversee the club’s finances rather than the men in grey suits within the board room. They will look into minimising the club’s losses as well as striving to find a buyer (similiar to the Hicks/Gillett saga currently ongoing at Liverpool FC).

As Dundee football club Chairman Harry Maclean recently uncovered to the BBC, the administrators run and assess everything at the club, short of picking the team on a Saturday:

“Speculating on the amount of figures and players that would be leaving is a bit pointless at this time because there’s only one person that’ll know that and that’s the administrator.”

The administrator may also not be as sympathetic in terms of personal issues which arise, such as the unfortunate and real threat of redundancies. The authorities will do all they can to accrue as much of the lost finances as possible. Gordon Chisholm recently feel victim to this process, being removed from his post as part of the administration proceedings at Dundee FC:

Their’s boys getting laid off in their with mortgages, its a horrendous time. I’ve never been through been through anything like that in my life and I hope never to see it again

Finally, If the club is then deemed by administrators to be incapable of saviour, and finances spiral into irreparable levels, then the threat of liquidation (commonly known as a “winding up” order) becomes a very real possibility. The ins and outs of this process can be read in detail at the UK statute law website.

The threat of administration truly is a worrying time for any club. Only time will tell what fate has in store for clubs such as Dundee, Liverpool and Portsmouth. Perhaps the biggest nail in the coffin and realisation of crisis would materialise when clubs of substantial stature fall victim to the perils of a debt ridden management system.

Until then, clubs struggle on as football pulls itself out of the financial culmination of the last decade and beyond.

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