Explained- What Does Administration In Football Mean?

“The club is going into administration until further orders.”

Irrespective of the club team you support, this is a statement, you don’t want to hear this statement. In fact, it is those rare instances where even a club’s major rival would express sympathy. The act of going into administration in football is not just a representation of the current situation but also casts doubt on the club’s future and survival.

But what does the term ‘administration’ in football mean?

Administration in football- What does it mean?

Administration in football is considered the last financial resort to save a football club. But how does a club go into administration in football? For this, we need to understand the structure of a football club.

Despite the love and passion that any team receives they are as much a corporate company as they are a football club. Just like any company they have assets and liabilities on their balance sheet. In addition, they also take loans for various purposes ranging from buying players, upgrading facilities and more.

Doomsday for ⁦@dcfcofficial⁩. Inevitable consequence of where club was heading under circumstances https://t.co/VO7cdpit2d

— Simon Stone (@sistoney67) September 17, 2021

These loans are liabilities for the club, And the loans need to be paid in a certain time along with some interest on them. So, when a club fails to do that it means that the financial situation is declining. And when these reach massive proportions, the club goes into administration.

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What happens in administration?

Under administration, the charge of a football club is taken by a group of people (usually accountants). These people are called “Administrators”. They start the process of organising the club’s finances.

So, how do they ensure the club’s survival?

In brief, by taking tough decisions. Any football club, like a company, needs a certain amount of cash in its account for its day to day activities. The administrator’s first job is to ensure that the club has a sufficient amount of cash for at least the next eight weeks. 

If the administrators are successful in this, they go to the next phase. This involves finding a new buyer in those eight weeks who can take over the club. If it fails to find a new owner, then the administrators opt for a Company Voluntary Arrangement (CVA). Under the CVA (which requires 75 per cent…