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Serie A season preview: AS Roma

AS Roma 3 hours ago
Read
May 8, 2007

Cheating the system

Leeds United's decision to plunge themselves into administration just two days before the end of the Championship season left a bitter taste in the mouth, but their actions almost pale into insignificance when compared to Boston United's antics on Saturday.

The situation, whereby relegated clubs go into administration in the last week of the season to avoid starting the following campaign with a 10-point penalty, has left the Football League with no choice but to review the flawed system.

It's too little too late, though. The League should have acted two years ago when Cambridge United set the precedent, taking the ten point penalty on May 1 after their relegation to the Conference had been confirmed. They had the chance to act but ignored it and now two more clubs have milked the situation.

Just as there are deadlines in place for transfers and cumulative suspensions, the Football League must now put in place a new threshold for the points penalty, whereby there is a definitive cut-off point before the end of the season for the deduction to take effect in the current campaign.

When the League met to discuss a possible points penalty in 2003, 14 clubs had gone into administration in the previous two years. From when the regulation was enforced in the summer of 2004, only five clubs have entered administration in three years - only two of them doing so 'legitimately'.

On Saturday, Boston, who at one stage last month faced being locked out of their York Street home due their perilous financial situation, faced Wrexham in a League Two relegation battle which would see the losing side relegated from the Football League.

Unbeknown to all but a select few, Boston were already plotting their way to becoming the third side to slip through the loophole.

Wrexham came from behind to win 3-1 and secure their League status. Behind the scenes, with just two minutes to go in the 2006/07 season and Boston's relegation a formality, administration papers were lodged to ensure they were deducted 10 points this season rather than from next term's Conference campaign.

This blatant, disgraceful disregard for sporting morals may be completely legal as far as Football League rules are concerned, but it has only heightened the anger among other clubs which have acted honourably.

One silver lining is that Boston, who entered the league five years ago on the back of being found guilty of financial irregularities, will be replaced by Dagenham and Redbridge. The Daggers finished second to Boston in the Conference in 2002 and most believe should have gone up in their place. Sometimes football throws up justice and heartening symmetry.

'What they did was perfectly legitimate but it has raised questions about our regulations. Do those regulations need to be addressed? Yes they do.'
Sir Brian Mawhinney

Boston, however, may find a nasty sting in the tail. The Football League have yet to formally accept the Pilgrims' 10-point penalty for this season - meaning it may be carried over. But that's only if the Conference accepts them as members - which with their past history is far from certain.

Coming so soon after Leeds 'took the hit' on Friday, it's not surprising that many had been calling for League chairman Sir Brian Mawhinney to look again at the structure of administration penalties.

Mawhinney admitted: 'The loophole is that neither Leeds nor Boston will apparently suffer any hardship from the 10-point penalty that the clubs together decided should be afforded to a club that went into administration.

'What they did was perfectly legitimate but it has raised questions about our regulations. Do those regulations need to be addressed? Yes they do.'

The administration rules came into being at the start of the 2004/05 season as a result of Leicester City's behaviour in coming out of their financial crisis in 2002. The Foxes, just after moving into a brand new stadium, entered administration in October with debts of £30million.

Although all football debts, such as player salaries and transfer fees, have to be paid in full if a club is to stay in the League, other debts can be cleared at a fraction of the cost. They were helped further by a change in insolvency law which meant the Inland Revenue and Customs and Excise no longer enjoyed 'preferred creditor' status and were no longer guaranteed being paid the full tax debt.

Leicester were able to pay the Inland Revenue just £700,000 of the £7million they owed. Although an additional amount was paid upon Leicester's promotion to the Premiership, slashing their debt to 10 pence in the pound gave them an unfair advantage over other clubs paying their dues. That they earned promotion to the top flight that very same season caused much anger.

Clubs felt that others were gaining a competitive advantage, shedding their tax bill and other debts, and emerging free to spend money on players.

Local businesses around the country were feeling the pinch, too. For instance, during Hull City's administration period unsecured creditors were paid nothing. One man to lose all his money was a certain Mr Chu - who was owed £5,912 in unpaid bills at his Chinese restaurant.

At Bradford City, local authorities were forced to accept 10p in the pound for their policing debts while Benito Carbone walked off with the full £2million he was owed for doing very little.

Wrexham can feel more aggrieved than most after becoming, in December 2004, the first club to be forced into administration and suffer the penalty. It did not come as a result of the mismanagement of footballing affairs but due to the dubious intentions of property developer Alex Hamilton, who owned 78 per cent of the club and wanted to redevelop the Racecourse Ground.

Despite the Football League having a clause which exempts clubs which enter administration due to circumstances beyond their control - the Robins argued this strongly - they were still deducted points. By the end of the season it had cost them their place in the third tier.

To see clubs which have been relegated on the pitch, rather than off it, clear their debts so freely must be extremely frustrating. At least Wrexham can take some pleasure in being the club which relegated Boston.

Why didn't the Football League take note of the problem in 2005 when Cambridge cheated the system, clearing their debt and starting afresh?

Lower league dealings, such as with Cambridge and Boston, often disappear into the background and only when a club the size of Leeds blatantly bends the regulations to the point of breaking do the authorities finally act.

Leeds will start life in League One with a fraction of the £35million debt they had a week ago and on a level playing feel with their new peers. That Ken Bates is in pole position to buy the club out of administration is one of the vagaries of company law in the United Kingdom - it happens all the time in normal business.

Leeds' actions must irk those in power at Nottingham Forest who have worked tirelessly to put a once proud club back on an even keel without the need for administration.

The sense of fair play would return if the League enforced ten point penalties for the following season for any club which was to enter administration after April 1. Seldom is a club already relegated prior to the start of this month.

It would bring integrity back to the competition and stop another Boston, Cambridge or Leeds happening in the future.

  • Any thoughts? Then you can e-mail Dale Johnson.