but administration is a company issue, not a playing issue. If this was an SC breach, or a players on the field breach or something like the problems Cronulla are facing in the NRL i would agree with you. But it isnt, its a company issue.

We cant justify punishing the new owners because we can't punish the old owners, there seems to be an argument here that starts with 'someone needs punishing'. It seems that we are seeing people wanting a punishment for the Bulls because someone needs punishing, we cant get the people responsible so lets get the closest thing we can, those who have taken over. To me that is not only wrong, its counter-productive.

My punishments would be that any director of a club going in to admin in RL is put on a blacklist and is unable to have any role or decision making power within the game for a period of 15 years, this list will be publicly available and called the persons found unfit and incapable list. Any businessman who gets involved in RL is generally on a bit of an ego trip, if we are going to punish them, you punish their ego.

Thats it, thats as far as we can realistically go before we are punishing anyone just to say we are punishing someone. Its not much but we dont have much leverage.

Personally i think the answer to stopping clubs going bust isnt any of the nonsense we see getting bandied about regarding punishing clubs, or relegating them or anything else. Its about having a structure to the game where clubs can flourish, where people can be held accountable and where people are held responsible. This new structure does exactly the opposite, and even encourages the opposite. IMO the RFL have abdicated themselves of any and all responsibility for anything and let the chips fall where they may. But punishing the bulls now doesnt rectify any of these things, its just misguided lip service to make people think they are doing something when in reality everything they are doing is too little too late.

The counter to that is the company is providing an unfair competitive advantage to the playing side in the event of being able to wipe away debts, so a points deduction is appropriate.

What competitive advantage is that, they still have to pay the players. Those players have contracts.

This just feeds in to the myth that the only thing keeping RL clubs from being sustainable, profitable, uber-businesses is that they pay players too much. That just simply isnt the case.

Now that we are returning to promotion/relegation, would it be fair, if a club stayed in the top flight by overspending and then finding a new owner by means of entering admin. and changing owner.
Or, being promoted and then clearing their accrued debts and starting life in the top flight with a clean slate.
In the sporting arena, it is right and proper for people or clubs who break the rules to be "punished".
If a club breaks the salary cap, they would rightly get a points deduction or hefty fine, even if they had changed ownership.
I just don't get this, "don't punish the new owners, they've done nothing wrong" nonsense.
They may not have, but they will have gained advantage with the purchase price of the club (assuming they actually paid for it in the first place).

Leaving aside London Broncos, who are being prepare for life in the Championship anyway, the question is still a valid one, even if I remove the (Obsessive?)reference to Bradford.

What happens if Team X finish 13th and are relegated along with London, only for it to become obvious in say November this year that Team Y have bankrolled their 2014 squad to 12th spot with cash they should have paid the inland revenue and other creditors and as a result, enter administration, wiping the financial slate clean, get themselves another set of owners for 2015 safe in the knowledge that even if they finish bottom of SL in 2015, they will have a far greater player budget and SKY grant than the 4 championship teams they will play in the middle 8.
By February 2016, the skulduggery of November 2014 is a distant memory as the top 12 will rarely be bothered by the top 4 of the lower league due to on-going financial limitations and restraint.

If I reintroduce Bradford to my question, specifically to Ady.....how would you feel if Team Y above were Wakefield and Team X Bradford bulls and Wakey spending beyond their means sent you down?

The rules should be clear in advance and should be:

Go into Administration = 6 points deduction

'Go bust' = relegation to the bottom division.

Note:
Going into Administration is an insolvency event but it's aim is initially is for the Administrator to sort out the entity (company) owning the club so it can come out of administration and carry on.

By 'going bust' we would mean a club passing to an new entity (company) without the creditors of the old entity being paid off.

Wrencat is spot on. The SmokeyTA rant about punishing new owners is total rubbish. Any new owners know what they are buying and offer to pay an appropriate price for the purchase.

Agree that directors of an entity owning a club that goes bust should go on a 10 year "Not fit & proper" register. But that is pretty much in the operational rules now. Just needs tightening up.

Mr Churchill wrote

We are talking about what should be the clear rules going forward.

IMO they should be as I set out above. Clubs then know what the impact of how they operate might be.

If a club were in Administration, potential new owners could offer to buy the EXISTING entity owning the club, introducing sufficient funds to satisfy the creditors and the administrator, and then the entity owning the club would come out of Administration and carry on, albeit with a 6 point deduction. If it were a SL club, it would carry on with SL level of Sky money.

Potential new owners could, alternatively, offer to buy the club from the Administrator by way of having it transferred to their own new company. They would offer less for it than they would have to pay to buy the existing entity but as a consequence would be getting a club that would be in Championship 1 with the associated much lower level of Sky money.

So, the incentive you ask about (ie incentive to pay more to creditors) is that they would get a club still entitled to a lot more Sky money.

Ady? Smokey? Any other apologist?

Re your above scenario Gutterfax. With my proposed rules, your club Y would start 2015 in Championship 1. So your club X would get a reprieve and still be in SL in 2015.

- because new owners buying an existing entity from an Administrator would undoubtedly do so only in conjunction with a Creditors' Voluntary Arrangement. Even if, by way of a CVA, the creditors got back say even as much as 75% of what they were owed the club would still have "got away with" avoiding paying creditors 25% of what they were owed and

- as a disincentive to clubs running their affairs in such a way that any application to the court for an Administration Order would be granted.

Hence my proposal above that rules for the future should include a clear penalty of 6 points deduction for any club that goes into Administration.

I assumed you meant the new owner would buy the existing business as it stood, with all its liabilities.

I can't imagine many folk who would buy a business out administration anyway (it is extremely rare) instead of transferring the assets to a new entity (as happens in almost every case where a going concern sale of some sort is achieved).

I can imagine even fewer who would do that AND not seek to repay all the creditors. Why would anyone want to do that? You get landed with any and all liabilities, claims and whatever that might crawl out of the woodwork in the future*, with no warranties or reprersentations to pursue with the former owners as you should have in a normal sale-and-purchase agreement, PLUS all the liabilities that crystalise on insolvency. That's why it virtually never happens.

The only times I have seen it happen is where administration is used as a resolution not for insolvency but for an irreconcilable dispute between shareholders (very rare); or where some unfriendly external creditor was seeking to put undue pressure on the business threatening the going concern, and protection was sought to prevent the bad guys from bringing a viable business down (happens sometimes).

The first quite clearly must have been a factor in the Bulls case, but the business WAS technically insolvent (as many clubs are) and would have become insolvent in actuality once OK sought to have his owner's loan repaid. But I suggest the situation you describe is extremely unlikely to be encountered, and certainly in an RL environment (it may have happened in soccer), unless maybe where the club and its liabilities were far smaller?

If it DID happen, and if the creditors were not paid in full, then for all practical purposes yes I agree that there would be little effective difference between buying the company out of administration and settling (say) 75% of the creditors , and buying the assets and settling 75% of the creditors. But my response was because I could not envisage it being a likely scenario in a Rl environment.

*EDIT: although yes, a formal CVA as part of the exit route ought to give a reasonable amount of protection, in fairness.

Why on earth are they going to do this? If your club goes in to admin you lose everything you have put in to it and the club itself. Why is someone going to go in to a club, spend their own money on it, then deliberately run up huge debts to get promoted or stay up just so that someone else can try and take the club out of Admin. That sounds like an absolutely mental scenario.

Sorry, your argument is that the new owners gain a competitive advantage because they bought the club at the price the market thought it worth? Thats less an advantage and more the way pretty much every transaction happens.

You are punishing the new owners, however you want to dress that up. The thing is I have yet to see one person list one actual benefit of us doing this, simply plenty running around demanding some sort of punishment to someone to quench their thirst for penance.

That the points deduction is a benefit for the new owners because it depresses the purchase price for a rugby league club is just ridiculously stupid, not only because for the large part people aren’t paying anything for RL clubs in admin points deduction or not, its depressing a price which is starting at £0, but even if it did work Why on Gods green earth are we trying to make struggling clubs LESS attractive to investors?