Barry Hearn - Administration is Cheating

[Silverhatch]

First time I've started a thread but I was so impressed by Barry Hearn (unusual I know) after hearing his interview on Talk Sport today that I thought I'd summarise his points.

Like him or not he was at least decisive and forthright about football’s parlous financial state and the Portsmouth fiasco in particular. To paraphrase, Hearn said:

Football clubs that live beyond their means are cheating in exactly the same way that athletes cheat when they use performance enhancing drugs. Everyone gets enraged by athletic cheats but (some) feel sympathy for clubs that find themselves up shit creek having spent more than they earn to gain an unfair competitive advantage over other clubs that have literally played the game.

It’s against the law to trade while insolvent – and any business that cannot pay a debt when due (e.g. being able to pay wages or the taxman) is insolvent. Directors that continue to trade when their business is insolvent are breaking the law.

He really rounded on the football authorities and Revenue and Customs saying that 10 point penalties and endless “tax credit” was no deterrent. Everyone should stop pussy footing around with the cheats. If you owe the taxman then you should pay on demand and if you can’t then you have to enter administration or wind the company up; and any club entering administration should be relegated 2 divisions. That was a proper deterrent and would stop all the cheating.

He said he will put these proposals to the league board at their next general meeting. No pussy footing from Bazza!

 

[Scoffers]

Putting the fact that I am far from being an expert in financial matters aside, I think he's right. I cannot see his proposals being accepted though, probably never going to happen.

 

[Mellotron]

I think the best way (again won't happen) is to say MUCH harsher punishments are going to be introduced, but warn clubs about THREE years in advance so they have time to get their "houses in order", and so that no clubs can say it's unfair they were caught out by changing legislation.

i.e. In 2013, we will bringing into effect new administration laws, 10 point penalties will be replaced by automatic relegation by 2 divisions at the end of the season.

Then watch everyone start to behave at last.

 

[Simster]

I like the general premise of punishing these clubs properly, but it's not really addressing the root of the problem, which is that ALL football clubs have to start spending within their means as of now. Wages need to be capped as a proportion of income, and TV income needs to be spread far more evenly.

It's not even about being fair - it's about preserving the sporting culture of this country, which is that you ought to be able to support your local football team without having it pillaged by asset strippers or f***ed about with by dubious foreign businessmen on an ego trip.

 

[Bozza]

How does it get measured though?

For example at the Albion, I would imagine we would see that...

Income - Expenditure = a negative number

...pretty much most seasons.

Have we been living beyond our means? Have we been cheating?

 

[bhaexpress]

How does it get measured though?

For example at the Albion, I would imagine we would see that...

Income - Expenditure = a negative number

...pretty much most seasons.

Have we been living beyond our means? Have we been cheating?

Cheating is not really quite the right word. We are not living within our means as such but the important thing is that by whatever means we are not short changing our creditors. I know that if I only got paid a percentage of what I'm owed because my employer was broke I would be remarkably unhappy.

 

[auschr]

My memory might be a bit fuzzy but I believe Halifax and Boston United [both not being owned by those bloody foreigners ruining our beloved game] were treated pretty harshly for going into administration. Both being kicked out of the conference and Halifax dropping like 3 league positions. I wouldn't mind seeing Portsmouth going away for good but if they manage to stay alive somehow they should be punished severely.

 

[Simster]

How does it get measured though?

For example at the Albion, I would imagine we would see that...

Income - Expenditure = a negative number

...pretty much most seasons.

Have we been living beyond our means? Have we been cheating?

I think you'd have an agreed maximum wage limit (perhaps weighted according to local house prices) which could only be exceeded with money declared as profit from the previous tax year?

I'm not sure though - this is all off the top of my head. Something needs to be done though.

 

[Herr Tubthumper]

How does it get measured though?

For example at the Albion, I would imagine we would see that...

Income - Expenditure = a negative number

...pretty much most seasons.

Have we been living beyond our means? Have we been cheating?

There is a mandatory wage cap in League 2. It's 60% of turnover. I'm not sure of the detail though.

 

[Simster]

Incidentally, I'm not entirely comfortable with the fact that we have a fairly bloated (and shit) squad in terms of numbers and we have spent money on transfer fees.

Sure, Bloom is bankrolling the club BUT it's not a level playing field and it's not sustainable.

 

[BensGrandad]

What a surprise Barry Hearn talking sense for once but his hope of getting his proposal accepted by league chairmen has 2 hopes Bob and No hope.

 

[Publius Ovidius]

Actually, tecnically most football clubs are insolvent and rely of the directors to finance day to day.

 

[34064 Fighter Command]

If Swindon can be demoted 2 divisions for making illeagal payments then I think Mr. Hearn has a fair point.

 

[Simster]

If Swindon can be demoted 2 divisions for making illeagal payments then I think Mr. Hearn has a fair point.

It was one division in the end. Initially two divisions, reduced to one on appeal.

 

[BensGrandad]

If Swindon can be demoted 2 divisions for making illeagal payments then I think Mr. Hearn has a fair point.

I would agree but don't think many club chairmen will, well not sufficient to get a proposal passed.

 

[seagulls4ever]

The thing about relating teams two divisions is unfair on the teams in the division they are relagated to as the relegated team is likely to rape the division, thus reducing the opportunity for promotion.

 

[captainmorganrum]

Administration was the only way that Wrexham got the last blood-sucking leach chairman out of the club.
When the adminstrators took over, he lost control of the club, paving the way to a legal challenge that meant we were able to prove he'd illegally taken over.
Not that it has done us much good in the mean time.

Clubs in admin aren't always cheating.
It's never that black and white.
But I'd support this "demote two divisions".

 

[Guest]

Well said , Barry Hearn

 

[CliveWalkerWingWizard]

Generally I would agree, however I think clubs lower down may enter administration by no real fault of their own. If you have a chairman who pays high wages and gets you success most clubs will go along for the ride (are we not in this position?). the problem is a team gets relegated , chairman leaves , fans abandon the club , players with big contracts (in relative terms). You could see a 2 league demotion as the nail in the coffin for some clubs.

 

[Rookie]

Football lives in a different world from other businesses which is strange considering the money that comes in and out of a club would have thought the Government would have insisted on some sort of regulation