THESE are economically straitened times. Times when the Cabinet takes a five per cent pay cut and the governor of the Bank of England refuses a pay rise for this year and even the year after.
But in the world of football, for the high-earning players and managers alike, life seems to be going on pretty much as normal.
In the events following the recent administration of Portsmouth, there was little more depressing than learning that the players – whose wages probably exceed £50,000 a week in many cases – were largely receiving their pay in full while charities were owed £4.3m and the people who worked at matches for St John’s Ambulance were going unpaid.
“When an ordinary business fails, the employees all suffer equally but in the world of football this is not the case,” says David Roberts, a restructuring partner at the law firm Olswang.
“There’s a parallel universe out there where all the normal rules of engagement do not apply,” he adds.
In the Portsmouth case HM Revenue & Customs is owed more than £20m and now it is challenging the so-called Football Creditor rules that allow the anomalies just described to happen.
Under these controversial rules, the Premier League is able to divert the club’s share of revenues from media rights and sponsorship to football creditors, which includes the clubs, players and management. The League argues that the rules give protection against the possibility of clubs collapsing altogether, with players no longer being paid in full, (poor things) leaving at will, putting creditors at risk of even greater losses.
But the Revenue says these rules are “unlawful” and “against public policy.” In taking out its writ, the Revenue said: “Non football creditors are being seriously short-changed and enough is enough.”
There is no certainty the Revenue will win its case. Indeed, it failed in a similar bid in 2004 when it tried to overturn a voluntary liquidation at Wimbledon on the ground that football creditors were being given preferential treatment.
Whatever the outcome of the case there is a feeling that even by defending its rules, the Premier League is making a public relations mistake.
“For a club to hang on to tax receipts while paying its players is grotesque,” says Roberts. “The League should not be encouraging that behaviour.”
Football needs to get its house in order – and fast. A defeat in this case may begin the process.