[sydtheeagle]

You know, as much as we hear about football clubs, in the Nationwide League in particular, being on the very edge of the abyss, I'm begining to think that we're all being taken for a ride. At the end of last season, when the foundations of the ITV Digital deal were starting to collapse, we were assured that if they did, a good dozen clubs would disappear over the summer. But guess what? All the usual suspects, however they managed to do it, are up and playing today.

In recent seasons numerous clubs, including my own, have found themselves more or less insolvent and in administration. Almost without exception, every one has survived. In straightforward business terms, it is far harder to liquidate a business than it is to deal with the creditors in an advantageous way and revive it. Don't believe me? Look at Marconi, a living example of how total mismanagement and a debt mountain can lead to a company being allowed to continue in existence.

The point is, I don't doubt that a lot of clubs are having tough times but I rather suspect that directors (who understand the legal principles of business) are exploiting supporters (who don't) in order to win the sympathy vote. It is highly unlikely that anyone's club will disappear tomorrow or the next day, but it might very well suit your chairman to have you believe that that might just be the case, and he's the saviour on the white horse. Sic transit...

[RichardL]

I have to say I always wonder how clubs like Coventry, Leicester, Derby & Bradford get as far into debt as they have. £50 million of debt is huge. Real Madrid may have been £100 million in debt but they buy players worth £40 million now and then. I don't see Coventry doing that, and they haven't even built a new ground either.
People say it's a a good thing that these clubs haven't gone under, but because so many clubs are irresponsbly overspending and getting away with it, it forces the otherwise responsible clubs to also overspend just so they can compete. It must be pretty galling to see your club relegated as you couldn't afford to sign players or pay high wages, only to see the likes of Bradford being able to thrive after administration, despite a ludicrous campaign of overspending for the past few seasons.

[sydtheeagle]

Originally posted by RichardL
I have to say I always wonder how clubs like Coventry, Leicester, Derby & Bradford get as far into debt as they have. £50 million of debt is huge. Real Madrid may have been £100 million in debt but they buy players worth £40 million now and then. I don't see Coventry doing that, and they haven't even built a new ground either.
People say it's a a good thing that these clubs haven't gone under, but because so many clubs are irresponsbly overspending and getting away with it, it forces the otherwise responsible clubs to also overspend just so they can compete. It must be pretty galling to see your club relegated as you couldn't afford to sign players or pay high wages, only to see the likes of Bradford being able to thrive after administration, despite a ludicrous campaign of overspending for the past few seasons.

Think Marconi. Or Worldcom. Or Enron. Or Global Crossing. Marconi has around £4 billion in debt, of which the banks have (more or less) been forced to forgive £3 billion. The debts that football clubs run up are absolutely trifling compared to the sums involved in the "real" world of commerce, and given a football clubs role in the community, etc., it is not altogether surprising that banks let them operate on a reasonably long leash. The fact is, pretty much no football club is big enough to, through negligent practice or otherwise, make any sort of dent at all in the financial markets.

[RichardL]

True, but if you have a league where each club has an average turnover of £5,000,000 and some clubs start spending £7,000,000 a year on transfer fees/wages then those clubs will be at an advantage (unless they sign useless donkeys) and other clubs will have to spend money they haven't got in order to compete with them. Clubs can be left with a choice of spending £2,000,000 a year that they haven't got and hoping they go up, or struggling instead and seeing their revenue drop through smaller crowds and losing perhaps £1,000,000 that way (and possibly going down which would cost them even more). Such financial irresponsibilty deserves to be punished in some way - perhaps not by going bankrupt but certainly if a club re-forms in order to avoid paying its debts then the 'new' club should be forced to re-start in Division 3 for example.

[sydtheeagle]

Originally posted by RichardL
Such financial irresponsibilty deserves to be punished in some way - perhaps not by going bankrupt but certainly if a club re-forms in order to avoid paying its debts then the 'new' club should be forced to re-start in Division 3 for example.

I must say, having been involved with a company facing insolvency, that I am sometimes staggered by how football clubs manage to walk away from their troubles with little or no apparent harm and, moreover, that the directors who mismanage and often rape a club are not held in any way to be personally liable (and the fact that a club is a limited company does NOT necessarily protect directors from personal action). I think, by and large, you're right that at the very least (like Fiorentina), a mis-managed club should have to start again from the bottom. Mind you, Division 3 would then become the Administration Division, given how many teams are in the crap, and pretty much all the solvent division three teams now would be automatically promoted.

[funkidaniel2001]

Swindon is one of those clubs that is constantly on the brink of that final collapse. The word round is fans were if we would last the season. I mean the club was advertising for all sorts on the front page of the local paper. Post it pad, ink cartage’s etc. We always look like we are going to go under. Have been in administration three times in the last two years. Only just paid back the taxman the money we owned him. It is a case of every season wondering if we will financially make it? It’s one of the joys of being a Swindon fan. Who would have thought that when we were gracing the premiership, six years later we would all be chipping in to get the club out of administration? We are, as a club, a fine example of what can happen to a football with bad management. We went up, gave are players a huge pay rise. I mean we had some good players, but not premiership standard so they should have had premiership wages. We also spent recklessly on players in a feeble attempt to try and save are selves from relegation and more financial ruin. It was, it is a vicious circle.