Premier League Boss Tries and Fails to Defend Football Insolvency Rules

Premier League head Richard Scudamore has attempted to defend the football creditors’ rule, following a lawsuit filed by Her Majesty’s Revenue and Customs (HMRC).

HMRC, quite correctly, claim the rule on paying soccer creditors first is ‘unfair, unlawful and unacceptable.’

However Scudamore insists the directive is necessary to prevent one team’s financial problems from destabilizing the entire league.

He said recently: ‘We will defend it on the basis of the chaos that will ensue if we don’t have it. We are a closed system: we trade on a closed basis between each other.

‘The idea you would put an administrative blockage of a due diligence; it’s a place we just wouldn’t want to go.’

Scudamore’s comments highlight just how manifestly unjust the football creditors’ rule is.

The English Premier League generates annual revenue of around £2 billion and is the soccer industry’s most lucrative domestic competition.

But if the football industry is to exist as a commercial enterprise, it must be subject to the same rules and regulations as other industries.

Insolvency legislation is created to govern enterprise; in regards to bankruptcy, there should be no special favours given to football clubs.

Why should they receive special treatment in the event of insolvency? They’re just another commercial enterprise within the UK economy. Sudamore is simply attempting to defend the indefensible.

It is grossly unfair to have an insolvency regime for the football enterprise, which is more favourable than the insolvency legislation as we know it.

Moreover, nowhere in either the Enterprise Act 2002 or the Insolvency Act 1986 does it state that football clubs should receive special protection. It’s laughable this issue has found its way so far to the high court.

There is no provision, clause, sub-paragraph or sentence to be found anywhere in either of these acts that gives football creditors preferential status; it’s simply a figment of their own imagination.


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