Saints to appeal relegation penalty
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Southampton Leisure Holdings plc, the parent company of Southampton Football Club, has gone into administration.
At a press conference on Thursday, the Administrators revealed that the Championship club could struggle to complete its fixtures this season. Specialists Begbies Traynor have been appointed as administrators.
Southampton still owe £24m on their St Mary's Stadium, which opened in 2001, and another £4m to Barclays Bank.
They have three home games remaining, their only realistic source of income, which means that after the match against Burnley on April 25 there will be no more revenue coming in to service the debt.
The move into administration has caused controversy with the parent company officially described as a separate entity to the football club itself, which means Saints should avoid the statutory 10-point penalty under insolvency rules.
But despite the insistence that the football club is not affected, the administrators' comments clearly suggest otherwise.
Derby County followed a similar route in 2003 and avoided any points penalty. There is no confirmation that Southampton will also avoid a deduction but if the Football League are unable to take action it seems likely they will again be forced to tighten up their regulations.
In 2007 they were forced to act after Leeds United and Boston United entered administration in the last week of the season to avoid a penalty for the following campaign. As with the Derby example, the Football League failed to learn from previous mistakes as Cambridge United had pulled the same move years beforehand.
Should the Football League order a ten-point penalty it will not be taken off until the end of the season when the club's Championship league position would be taken into account. Should it have no bearing on their divisional status it would be applied for 2009/10. But should they finish outside the bottom three it would result in the club being dumped into the relegation zone, though they would start next season in League One on a level playing field.
Dr John Beech, from the Centre for the International Business of Sport at Coventry University, an expert on insolvency in football, said: "Will they have 10 points deducted? That remains to be seen. Football League Regulation 12.3.1b states that the ten points will be deducted in cases where a club (my emphasis) "have an administration order made in respect of that Club".
"In this case, the club itself hasn't - it's the parent company that has gone into Administration. If they decide they cannot impose a 10 points deduction because of this, we can expect to see the loophole closed shortly, albeit too late to apply it to Southampton.
"Extending the catchment of the Regulations to parent companies may prove problematic. For example, in 1992 Birmingham City was brought down by the collapse of the BCCI bank, also owned by the Kumar brothers. Few would argue that the club should, in similar circumstances, be penalised with a points deduction. Deliberate structuring of companies to avoid points deductions is another matter however."
Chief executive Rupert Lowe Lowe, chairman Michael Wilde and director Andrew Cowen have all resigned from the company with immediate effect, although a statement from SLH said the club is "unaffected by these insolvency proceedings''.
In a statement, joint-administrator Mark Fry said: "Southampton Football Club has a long history in English football and could be an extremely attractive investment for the right buyer.
"We are working hard to preserve the value of the football club and produce a positive outcome for all stakeholders, and I ask that fans continue to show their support for the team for the remainder of the season as we seek to show the best face possible to potential investors.''
Saints are currently three points from safety and face rock-bottom Charlton at St Mary's on Saturday - and the news that they may not be deducted 10 points is unlikely to sit well with the teams around them in the relegation scrap.
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Saints sunk after 10-point penalty
Southampton have been consigned to relegation to League One after the Football League deducted the Championship club 10 points.
The governing body launched an investigation into Saints' finances after their holding company, Southampton Leisure Holdings plc, went into administration.
Southampton argued that because the club itself was not in administration, they should avoid the mandatory points penalty.
But on Thursday, the League decided that the club and the holding company are "inextricably linked as one economic entity", and that the 10-point deduction stands.
As the holding company, chaired by ex-club chairman Rupert Lowe, entered administration after the League's March deadline, the points deduction will take effect this season should Southampton avoid relegation.
However, if Saints go down anyway - they are currently four points adrift with two games remaining - then they will begin next season in League One on minus 10 points.
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Unlucky Team owe bank haiz
Downfall like Leeds (but Ok la Saints coz they not famous)
Valencia also maybe downfall too -
Saints to appeal relegation penalty
Southampton are set to launch an appeal against the 10-point penalty which has condemned them to relegation from the Championship.
Their statement read: "The administrators and the club were informed of the League's intention to issue a release on the findings of the independent forensic report five minutes before its publication, leaving no time for consultation and to inform fans, players and staff.
"We are of the opinion that an incorrect conclusion has been reached. The football regulations do not apply to the circumstances surrounding Southampton Football Club."
Saints also refuted the Football League's claim they withdrew their co-operation towards the investigation.
The statement concluded: "Both the club and the administrators are now considering their positions and expect to launch an appeal."
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A club with a great history... damn.