Clubs could be docked as many as 10 points for going into administration under radical new proposals being put before the entire 72-strong Football League this week.
The move, the idea of the Football League's new chairman Sir Brian Mawhinney, is in response to growing concern that some clubs are deliberately choosing the easy way out, protecting themselves from creditors after plummeting into financial difficulties.
Leicester City returned to the Premiership this season after a period in administration while Notts County, who have been in a similar position for a record 15 months, have been given until December to pay off their debts or risk being thrown out of the league.
Under the proposed penalties, to be introduced next season if supported at tomorrow's extraordinary general meeting of the Football League clubs going into administration would be docked up to 10 points, with the right of appeal within seven days. Any club remaining in administration for more than 18 months would be expelled from the league.
Even though company law allows for administration, it is hoped that mandatory sanctions will discourage clubs from amassing huge debts without considering the consequences. "I appreciate this would be a huge step for clubs to take, but the Football League has to be a protector of competitiveness," Mawhinney said. "Not all clubs go into administration for the same reasons and therefore there will be an appeals mechanism."
Tomorrow's meeting will also consider a proposal to extend parachute payments to the second and third divisions. Clubs will be asked to approve a proposal giving relegated First Division teams £120,000 each for one season, and Second Division clubs £50,000 each. "Moving down a division puts a strain on finances," Mawhinney said. "The parachute payments between the Premiership and the First Division have been extremely important and there should be some assistance to get over the hurdles of the other divisions. I hope it goes through."
Ipswich's chairman, David Sheepshanks, who said he was voting in favour of the new parachute scheme, expressed caution about imposing sanctions for clubs plunged into administration, a fate suffered last season by his own club. "We bore the brunt of the market collapsing and I take issue with those who say administration is a convenience because it's anything but," he said.Reuse content