Southampton parent company enters administration

Southampton Leisure Holdings, the parent company of Southampton, entered administration on Thursday but claimed that the struggling Championship club would not be affected by the move.

The widely expected announcement came a day after the company announced that it had missed an end-of-March deadline to refinance debts of 27.5 million pounds.

Under Football League rules, clubs that enter adminstration are automatically docked ten points but Southampton are hoping to avoid that penalty by arguing that the club itself is distinct from the parent company and remains a going concern.

That interpretation of the rules is bound to be strongly challenged when the issue is discussed at a meeting of the Football League’s board next week.

A points penalty this season would mean almost certain relegation to League One, the third tier of English football, as Southampton are currently second from bottom of the Championship, three points adrift of safety with only seven matches left.

Alternatively, a points penalty could be imposed at the start of next season, potentially handicapping an attempt by the club to return to the Championship.

Southampton’s financial plight is largely due to the costs incurred in building a new 30,000-seat stadium, St Mary’s, which have proved unmanageable in the aftermath of the club’s 2005 relegation from the Premier League.

In a statement, the administrators said they would be seeking a buyer for the football club.

Joint-administrator Mark Fry said: “Southampton Football Club has a long history in English football and could be an extremely attractive investment for the right buyer.”