When Lord Mawhinney last week voiced his fears that a big name club could go out of business if football’s worst excesses weren’t reigned in he could have hardly asked for a better example than Championship club Southampton. Having struggled on and off the pitch for several seasons the Saints announced their financial troubles were such that the troubled team may not even see out the season.
Yet while the fans rally to save the club, the plight of the Saints hasn’t attracted too much support from other clubs in crisis due to the way they’ve handled the situation.
The Loophole
Rather than put the club itself into administration, it’s the club’s holding company – Southampton Leisure Holdings – that has called in the administrators. Their argument is the holding company is a separate entity from the club itself so, by placing SLH in administration, Southampton FC won’t take the ten point points deduction automatically handed out for clubs who enter administration.
It’s a neat loophole and one that may just succeed. SLH has argued that given it also owns a piece of land known as Jackson’s Farm, that was donated to the club by former president John Corbett, the football club is not its only going concern and there is a clear distinction.
Legally, the Saints seem to have a case as the League’s rules state that the points deduction can only be applied if the club itself enters administration. But SLH is intrinsically linked to Southampton FC to the point that is SLH collapses, so does the football club.
This, then, could be the ‘Leicester moment’ for the league’s administration rules (the Foxes entered administration in the 02/03 season, restructured their debts and got promotion, prompting the league to introduce the penalty). If the Saints escape a points deduction then other financially stricken clubs may be tempted to go down a similar route.
Certainly clubs who’ve already taken a points deduction this season will be watching with interest. Luton Town, for one, have been owned by a holding company in the past and at least one of their points deductions acknowledged the link between the company and Luton Town FC. Where points deductions and potential financial losses are concerned, you can bet the lawyers won’t be too far behind. Just ask West Ham.
Although this situation is not of the league’s making, it hardly helps their case when it comes to making sure clubs don’t overreach themselves. The points penalties handed out to the likes of Leeds, Luton, Rotherham and Bournemouth have been as arbitrary as they have been, in some cases, punitive. While you can sympathise with the current plight of Saints fans, the south coast team won’t win too many friends if they dodge the penalty.
And, as is always the case in situations such as these, it’s the fans who suffer most. While many of their Premiership years could be classified under the file “suffering, suffering and more suffering”, this current bout stems from the construction of the St. Mary’s Stadium.
New Stadium Blues
Southampton had been one of the founding members of the Premier League, having enjoyed top flight football since 1978. But as the Premier League slowly evolved into the cash cow it has become today, it was clear that the compact and somewhat cramped Dell needed serious work or replacing. By the time the Saints moved to St. Mary’s, the Dell could accommodate just 15,000 compared to the 32,689 of the new ground.
Yet in recent years the Saints have barely come close to filling the ground on a regular basis and corners of the stadium have been shut as the club desperately looked to save money. The current financial problems stem from the building of the ground, which cost £34m. Of that, £24m is still owed to Norwich Union, while Barclays are waiting on another £4m, along with a host of other small creditors. In total the debt is around £30m.
Former chairman Rupert Lowe, who resigned last week, oversaw the construction of the stadium and remains a divisive and often unpopular figure in the city. His removal from the board should smooth matters for the next owner, assuming there is one.
Ultimately, Southampton’s tale is all too familiar. The team had struggled against relegation from the Premier League on a regular basis, bar the period under Gordon Strachan. After the Scot left, the club lurched from manager to manager as they dropped further down the table.
When they were unexpectedly relegated in 2005, many predicted the Saints to bounce back up. With several players still on Premiership wages, Southampton failed to bounce back at the first attempt and the club have been slowly sliding backwards since then. It’s a cautionary tale that many current Premiership teams like Newcastle would do well to take note of.
The Future
There are a few reasons for optimism on the south coast. Southampton’s excellent youth setup, which counts Theo Walcott and Gareth Bale among its graduates, still continues to produce top-quality players, with Andrew Surman the latest to be linked with a move to the top flight while Adam Lallana has also attracted interest from other teams.
The fans have also swung into action and there’s a real momentum behind the campaign to keep the Saints alive. With talk of the local council buying the stadium, the Saints could well become the highest-profile community, or even fan-owned, club in the country (although it’s likely they’ll be starting next season in the same division as the Trust-owned Stockport County, and possibly even Brentford and Exeter City as well).
According to the administrator, there have also been 17 inquiries to buy the Saints. Many of these will come to nothing, but there may still be a white knight out there for Southampton, who are a big enough club while a large enough fanbase to make them attractive to a potential investor.
But previous history and reputations will count for nothing come the end of the season as the club look likely to be playing in League One, assuming they survive. And points deduction or no points deduction, if they play like they did in their loss to Charlton at the weekend, on the pitch that is, sadly, where they deserve to be.
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