Could Administration save us?

Clubs going into Administration has become an annual event (40+ since 2000)  although it's largely been the preserve of the lower two divisions and the Conference that have been affected so far. The points deduction that comes with it almost inevtiably means relegation for those involved as Administration usually accompanies a club struggling for form with limited saleable playing assets and revenues from match receipts suffering due to poor crowds. I believe there's a real chance of some of our fellow strugglers suffering this fate before the season ends and it could just have the affect of saving our bacon.

Leeds United did go into Administration in the Championship, but only once they had been technically relegated in a feat of underhand dealing that eventually caught up with Ken Bates. Since then, the rules have been tightened to prevent clubs deliberately taking advantage of Administration in this way and I don't believe any Championship side has followed suit.

However, a number of factors are affecting the game which are putting the squeeze on like never before. The global economy is limiting the interest from big investors in gambling on football clubs from the top down. Newcastle, Portsmouth and West Ham are three obvious examples of clubs publicly desperate for investment and which have significant underlying debt and enormous potential operating exposures; woe betide them if they get sucked into a relegation dogfight. Our own

 experience with Zabeel has highlighted a "think again" approach from the investors of yesterday and we were relatively cheap and reasonably sound in terms of our exposure. Even Russian oligarchs have taken a financial battering in the last year. All-in-all, the likelihood of big overseas investements is probably limited now to the Big Four and even that would be on significantly reduced valuations.

With less money coming in at the top, there is obviously less to percolate down. The Championship contains sixteen former Premier League clubs who are struggling to adjust to the reality of operating on starvation revenues and most are carrying increasingly large and troublesome debt. Watford are a prime example and their Chairman has been forced to resign this week following a vote of no confidence from his Board. Elton John severed all connections with the club a few months ago and have since departed company with Aidy Boothroyd (for £600k+). There are plenty more and the current economic climate means existing revenues from sponsorship, advertising and hospitality will come under increasing pressure, not to mention ticket sales and other spend from the man in the street. 

If one (or two) club(s) were to go into Administration, it might make it more acceptable for others if they calculate that a points deduction would not necessarily spell relegation and that they still had a fighting chance of avoiding the drop. It's equally likely that the first to go might be a bigger club previously thought to be in reasonable shape.

Charlton are in significant debt, albeit "friendly" and to our Board of Directors, but who' s to say that it will remain that way? Already this week there are rumours of a Boardroom bust-up and an attempt to oust Richard Murray. What if one or more of them decided to call in their loans? With a squad already stripped of it's largest playing assets, we could struggle to raise the cash necessary to remain in control of our destiny. Things won't get any better next year based on our league struggle this season. Season ticket sales look set to plummet and additional matchday spend with them. I am sure we will be alright but we shouldn't be complacent because it's looking increasingly likely that someone's going to come a cropper. Let us hope that it works in our favour if it does happen.