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RFL relaxes rules on administration

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Clubs that enter administration will avoid a points deduction as a consequence of Covid-19. League Express can reveal that the RFL has made a change...

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You'd have to assume that there are several clubs teetering on the brink of Administration, otherwise why bring in this new rule?

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1 minute ago, scotchy1 said:

Why have the old rule in the first place?

To stop clubs using administration as a way to avoid paying creditors, including playing staff.

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Just now, scotchy1 said:

And that's ok now?

Did deducting points stop clubs going into administration and not paying creditors including playing staff?

You're asking me to prove a negative? It may have stopped some clubs on several occasions but by virtue of it stopping them we'll never know?

Those that have gone into administration, I don't think have necessarily been treated fairly, but you asked "why have the old rule in the first place?" My reply was the logic behind that which is why all sports leagues in the UK afaik have some similar provision.

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12 minutes ago, paulwalker71 said:

You'd have to assume that there are several clubs teetering on the brink of Administration, otherwise why bring in this new rule?

Yes, I'd say it's quite a worrying indication about the overall health of the clubs.


Build a man a fire, and he'll be warm for a day. Set a man on fire, and he'll be warm for the rest of his life. (Terry Pratchett)

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44 minutes ago, scotchy1 said:

If it stopped them then, why wouldnt it stop them now?

My question was in the context of the of rule being amended now. 

If the rule worked then (which I dont believe it did, it punished new owners for the actions of the old ones) it would work now. If its not applicable now, why was it previously. 

Because then as opposed to now it was through the actions of the officers and owners of the clubs who entered administration that the league took what action they considered appropriate - but I will agree with you on the punishment handed to new owners should never have been so.

Alternatively in the present situation the influence that could result in some clubs entering administration is most likely out of their control through not generating any cash flow due to the lockdown.

Like others have pointed out on this thread I too believe that there must have been a number of club's contacting the RFL because they may be in precarious position for the governing body to react with the statement they have issued.

Edited by Harry Stottle

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Makes perfect sense to me - this isn't business as usual and this seems like a sensible step 

Short term solution for what will hopefully be a short (ish) term problem

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2 hours ago, scotchy1 said:

If it stopped them then, why wouldnt it stop them now?

My question was in the context of the of rule being amended now. 

If the rule worked then (which I dont believe it did, it punished new owners for the actions of the old ones) it would work now. If its not applicable now, why was it previously. 

Because it seems serious external factors could force several clubs into administration - far more than in any normal circumstances. Clearly thats the risk the RFL are mitigating for here.

Fancy having a league where half the teams are on minus points? 

Retrospectively I agree, the threat of points deductions is flawed unless the owners stayed on. 

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1 minute ago, scotchy1 said:

That just seems nonsensical though. You get a points deduction unless others get one too in which case you dont. 

The fact it is negated now just highlights how silly it was to have it in the first place

Its not though is it. In normal times there is few legitimate reasons for an RL club to be mismanaged into administration beyond mismanagement itself. Can't blame poor onfield performance as that is the nature of the business, can't blame lower crowds as thats part of your business to attract them. 

As I'm sure you are aware these are not normal times. Clubs won't be mismanaged into administration if it happens and clearly the RFL are expecting it to be at least a possibility for a number of clubs. 

It may change back, it may not. Unless they can come up with a better way to discourage financial imprudence I don't see what else they can do?

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7 hours ago, paulwalker71 said:

You'd have to assume that there are several (WEST YORKSHIRE)clubs (with ground not fit for a21st century top flight sport) teetering on the brink of Administration, otherwise why bring in this new rule?

Once again the RFL let the West Yorkshire mafia get another free hit. What is the point of the government loan then if it isn’t to avoid administration?

 

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1 hour ago, Bostik Bailey said:

Once again the RFL let the West Yorkshire mafia get another free hit. What is the point of the government loan then if it isn’t to avoid administration?

 

In future if you want to make your points, would you mind not editing my posts to do so

Thank you

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1 hour ago, Bostik Bailey said:

Once again the RFL let the West Yorkshire mafia get another free hit. What is the point of the government loan then if it isn’t to avoid administration?

 

And Salford who have no backer and Wigan who've released a statement from the chairman saying how bad things are

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I would guess it is a similar reaction to the govt changing the punishments on trading while insolvent/wrongful trading... previously you could end up in jail, now they are relaxing that for a short period of time as the insolvency is not caused by your actions but by COVID issues.. 

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1 hour ago, scotchy1 said:

But again this misses the point that the club going in to admin doesnt get punished. The one coming out does.

So it cant be akin to trading whilst insolvent because the business trading when the club goes in to admin doesnt get punished

I am not talking about the rules pre this issue or "punishment" I am simply pointing out the change is akin to the more widespread law change.. 

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As was pointed out earlier, these are unprecedented times, and just look at the number of big corporations who have entered administration/filed for bankruptcy. RL is no different, in fact maybe we should be surprised if at the end of this we find that everyone comes through unscathed, because that’s not happening in the rest of society.

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13 hours ago, Oldbear said:

As was pointed out earlier, these are unprecedented times, and just look at the number of big corporations who have entered administration/filed for bankruptcy. RL is no different, in fact maybe we should be surprised if at the end of this we find that everyone comes through unscathed, because that’s not happening in the rest of society.

I am afraid you are correct.Sadly we are going to see some of our current clubs go to the wall or possibly end up going amateur.

 

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