The Football League released these statements regarding the fate of the three clubs in our League who are having financial difficulties.
Moving on to Rotherham United, the Football League's statement goes on to say:
Preliminary information was received from a new company that wishes to take Rotherham United's place in League 2. The new company has not yet submitted a complete application to The League, although it has indicated that it would wish to play the club's matches at the Don Valley Stadium in Sheffield. To assist the new company in completing its application, the Board decided to remind it that a club is ordinarily required to play its matches in its existing town. Clubs can be permitted to play in other locations on a temporary basis while a new ground is being built or developed. In Rotherham United's case, if the new company were to confirm an application to play elsewhere on a temporary basis then before giving permission the Board would require it to agree to return to Rotherham within a period of four years and also to lodge an irrevocable bond of £750,000. The new company is also reminded that all football creditors must be paid in full. In Rotherham's case, the Board was told that this includes an outstanding debt to the Football Stadia Improvement Fund.
So most of Rotherhams problems are based around the problems with the ground, an in itself this would seem petty on the football leagues behalf. There problems are well documanted having lost points on two occasions over the past few years, and they appeared to be reaching the light at the end of the tunnel. However LCM does have one important question to ask. If Rotherham do owe money to the football league which hasn't been paid, how are they justifying funding the purchase of Mark McCammon and Michael Boulding, two players who will not come cheap at this level? Are they in fact gaining more of an advantage over opponents by using money that could be used to pay debts to fund new player wages? LCM doesn't think further points deductions are in order, but if the situation continues then surely the Legaue may have to take some action.
As for AFC Bournemouth, the League's statement simply says:
The Board decided to defer discussion of issues surrounding the administration of AFC Bournemouth until all the necessary paperwork had been submitted
It looks like Bournemouth may be facing a ten point deduction as well, and possibly means that three teams will collectively start on -50pts. Does this devalue the competition itself? Is League Two rapidly becoming a case of 'financially strongest survive'? Last season MK Dons and Peterborough had money to spend and ran away with the league, whilst everyone else spent within their means (bar Rotherham of course) and finished where they could.
LCM will monitor the situations of all three clubs closely and hope the football league strive to make League Two a fair competition rather than a playground for punishments.
Luton Town was unable to agree a Company Voluntary Arrangement (CVA) with its creditors and as a consequence is unable to satisfy the normal conditions of The League's insolvency policy for exiting administration. The Board decided, however, that it was prepared to exercise its absolute discretion under its 'exceptional circumstances' provisions in order to accommodate the new entity. In accordance with recent precedent, the Board decided to include the following principle conditions of entry as a pre-requisite to the exercise of that discretion:
1. The new company (Luton Town 2020) should pay the unsecured creditors the amount offered at the time of the CVA hearing (16 pence in the pound).
2. A 20 point deduction should apply in the 2008/09 season, which also takes into account the fact that this is the club's third insolvency event in the last ten years.
It would seem that Luton have been slapped, and slapped hard despite the new potential owners taking every step to try and steady a rapidly sinking ship. LCM's own view is that a 10pt deduction was probably fair, but a further 20pts is disgraceful, especially considering the weaker punishment handed out to Leeds Utd last season. This ruling could effectively end any chance Luton have of survival next season, making every game they play a farce. Whilst punishment for financial irregularity is required, should that punishment extend to effectively relegating a football team? When Boston 'cheated' themselves to promotion in 2001 they recieved Aa 2pt deduction.... is their crime ten times less servere than Lutons? Have Luton gained on the field through the off field problems? The answer in every case is no, and 30 pts is far too harsh for the Hatters.
1. The new company (Luton Town 2020) should pay the unsecured creditors the amount offered at the time of the CVA hearing (16 pence in the pound).
2. A 20 point deduction should apply in the 2008/09 season, which also takes into account the fact that this is the club's third insolvency event in the last ten years.
It would seem that Luton have been slapped, and slapped hard despite the new potential owners taking every step to try and steady a rapidly sinking ship. LCM's own view is that a 10pt deduction was probably fair, but a further 20pts is disgraceful, especially considering the weaker punishment handed out to Leeds Utd last season. This ruling could effectively end any chance Luton have of survival next season, making every game they play a farce. Whilst punishment for financial irregularity is required, should that punishment extend to effectively relegating a football team? When Boston 'cheated' themselves to promotion in 2001 they recieved Aa 2pt deduction.... is their crime ten times less servere than Lutons? Have Luton gained on the field through the off field problems? The answer in every case is no, and 30 pts is far too harsh for the Hatters.
Moving on to Rotherham United, the Football League's statement goes on to say:
Preliminary information was received from a new company that wishes to take Rotherham United's place in League 2. The new company has not yet submitted a complete application to The League, although it has indicated that it would wish to play the club's matches at the Don Valley Stadium in Sheffield. To assist the new company in completing its application, the Board decided to remind it that a club is ordinarily required to play its matches in its existing town. Clubs can be permitted to play in other locations on a temporary basis while a new ground is being built or developed. In Rotherham United's case, if the new company were to confirm an application to play elsewhere on a temporary basis then before giving permission the Board would require it to agree to return to Rotherham within a period of four years and also to lodge an irrevocable bond of £750,000. The new company is also reminded that all football creditors must be paid in full. In Rotherham's case, the Board was told that this includes an outstanding debt to the Football Stadia Improvement Fund.
So most of Rotherhams problems are based around the problems with the ground, an in itself this would seem petty on the football leagues behalf. There problems are well documanted having lost points on two occasions over the past few years, and they appeared to be reaching the light at the end of the tunnel. However LCM does have one important question to ask. If Rotherham do owe money to the football league which hasn't been paid, how are they justifying funding the purchase of Mark McCammon and Michael Boulding, two players who will not come cheap at this level? Are they in fact gaining more of an advantage over opponents by using money that could be used to pay debts to fund new player wages? LCM doesn't think further points deductions are in order, but if the situation continues then surely the Legaue may have to take some action.
As for AFC Bournemouth, the League's statement simply says:
The Board decided to defer discussion of issues surrounding the administration of AFC Bournemouth until all the necessary paperwork had been submitted
It looks like Bournemouth may be facing a ten point deduction as well, and possibly means that three teams will collectively start on -50pts. Does this devalue the competition itself? Is League Two rapidly becoming a case of 'financially strongest survive'? Last season MK Dons and Peterborough had money to spend and ran away with the league, whilst everyone else spent within their means (bar Rotherham of course) and finished where they could.
LCM will monitor the situations of all three clubs closely and hope the football league strive to make League Two a fair competition rather than a playground for punishments.