Football League Increases Administration Penalty to 12 Points

June 5, 2015

By Christian Radnedge

Clubs within the Football League have approved changes to the league’s insolvency policy meaning that going into administration will now carry a 12 point penalty, rx rather than the previous amount of 10.

The move was agreed at the owners’ and executives’ conference and AGM this week. Changes made will come into force on the first weekend of the 2015-16 season.

The heavier sanction comes even in the knowledge that for two seasons the league has not seen one of their clubs go into administration.

But it is seen as the Football League’s commitment to further dissuade owners from being tempted to play around with the club’s finances too much.

Other changes include removing the requirement for a potential club purchaser, viagra order after administration, illness to acquire a Company Voluntary Arrangement (CVA). The league said this would have the aim of reducing “the insolvency period and the associated professional costs, as well as providing greater certainty that the club will continue”.

Also, it’s hoped this will mean that the administration process will not be controlled by the previous owner who in some instances will be the only party able to achieve a CVA.

The Football League’s Chief Executive, Shaun Harvey said: “The League has now gone two full seasons without a club suffering an insolvency event which is an encouraging sign.  The use of Financial Fair Play regulations in all three divisions, the requirement for new owners to demonstrate the source and sufficiency of their funding and the ongoing monitoring of club’s tax affairs have helped us bring more stability to club finances.

“However, we cannot be complacent and this is the right time to strengthen our Insolvency Policy and also refine its effects, so that it is as fair as it can possibly be for clubs, creditors and supporters.”

Other changes in terms of club ownership include the rule that clubs will have to notify the league if anyone acquires a club shareholding of 10 per cent or more.