Serendipity

Monday, August 22, 2011

The Golden Share (a.k.a. HMRC v Football)

All football clubs own a Golden Share which they lodge with the FL/FA as a promisory note that they will abide by their rules. The Golden Share allows clubs entry to cup and league competitions. If the Golden Share is revoked then a football club has nowhere to go amd might as well not exist.

One of those rules is the Football Creditors First rule. This obliges all clubs to pay all debts owned to all players and clubs in full and on time. Should a club renege on a payment then the granting of the Golden Share is brought into question and a club can be expelled from all competitions again meaning that, effectively, it would cease to exist.

In cases of extremis then the FL can remove the Golden Share from a club but grant them continuance in competition pending resolution of the problem concerned. This is exactly where Plymouth Argyle currently stand and our Golden Share has been revoked/suspended pending the outcome of the administration process.

HMRC is not happy with the Golden Share and the ruless attached to it because HMRC always loses out as a non-secured creditor. As a result they have been deprived of millions of pounds by various high profile football clubs using the administration process as a maenas of escape from financial meltdown. As a football fan I see this as acceptable, if perhaps not "OK", but as a tax payer and a British citizen it incenses me just as it incenses HMRC.

As a result of this HMRC has been relentlessly pursuing football clubs for some time now and is determined to see a precedent set which challenges the Football Creditors First ruling and it was HMRC who were first to chase PAFC for monies owed. So far HMRC has failed but sooner or later it will set the precedent that it strives for.

Football will need to seriously re-adjust if that ever happens because the guarantee of payment lies behind nearly every deal that is made between clubs themselves and clubs and players; nobody pays up in full upfront for anything these days.

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