Administration Rules

[usafan10]

Hello all,

I am in February of my 2nd season with Liverpool. My balance is approaching 0. I'm currently at around 5M and losing over 1M per month. The only messages I have received from the board have been about a possible takeover, which has been going on for about 2 months. I listed a few players during the January window but didn't get any offers. I'm new to the game and football in general. Does a club go into administration as soon as the balance reaches 0? Thanks.

 

[Chriswin8]

uuhhm im not really sure but ill try and help

In simple terms it is a miscalculation of the cash flow.

Whatever the underlying causes, administration generally follows the point at which someone, (usually the taxman) says, "you owe us, and we'd like to be paid," and the club's head of finance says, "oops, we haven't got the money".

A check of the balance sheet of the average Football League club still shows far too much money as a percentage of turnover goes on wages.

The financial model isn't great, propped up by fans who keep on buying the product no matter how bad it is, but then football is a business full of people making irrational decisions with their money.

Chairmen get seduced by the promises of managers that buying another decent centre-back and a forward will turn the club's playing fortunes around. Yet the reality is, nothing can ever be guaranteed.

WHAT IS ADMINISTRATION
AND WHAT DO ADMINISTRATORS DO?
They're accountants whose job is to try and get the best deal for the business and the creditors, by trying to find a buyer, or minimising the losses. Going into administration is a legal move, which carries legal obligations.

Responsibility for running the club goes to the men in grey suits, instead of the sheepskin coats. They look at how to improve revenue streams, often by selling off assets, and using their contacts to try and pull in new investment, and do deals with the creditors.

It's an admission of failure by the club's board, and once the administrator's in, he's in charge of pretty much everything apart from coaching the players and picking the team.

here you go hope it helps lol

 

[christophermcl]

not sure exactly but no, administration does not start as soon as your balance reaches 0. I am Vauxhall and 450k in debt.

 

[Max]

it happened to me at Charlton when I got to around 2 million in debt, I'm not sure if it will be any different for other clubs though...

 

[usafan10]

Thanks for the quick replies. It looks like I should be able to get through the season and then hopefully sell a few players. I'm currently in 2nd place, 1 point behind Man United and only 5 points ahead of the 5th place team. I'd hate to miss a top 4 finish because of a point deduction. Thanks again.

 

[gillrfc]

trust me it dnt happen in real life rangers are 30mil in debt and man utd are are 100s of mil in debt its nt gonna happen 2 ur club any time soon

the best way to help out release or sell 4 as much as u can get players u dnt use n get them off ur wage bill. dnt worry about ur balance sheet until the board say sumfin about it. takeovers can take a while jst b patient