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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, 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, after administration, 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
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