Kieran Maguire: EFL’s Derby ruling could ‘open floodgates’ for Sunderland and co
The EFL is fearful that clubs like Sunderland could go into administration if Derby County’s points deduction is not upheld.
So says finance guru Kieran Maguire, speaking exclusively to Football Insider about the latest developments in the Derby case.
The Rams have lodged an appeal after they were hit with an automatic 12-point deduction for entering into administration in September.
But the Daily Mail reported on 16 October that the EFL are worried that overturning the penalty will prompt a slew of clubs to enter administration.
Sunderland lost £2.6million in the last financial year but their prospects are relatively healthy following Kyril Louis-Dreyfus’ takeover.
Maguire, however, warns that overturning Derby’s points deduction could have far-reaching consequences for all EFL clubs.
He told Football Insider correspondent Adam Williams: “If we go back in time to around about 2005, clubs were using administration to wipe off debts.
“There was little disincentive to do so. The idea behind an automatic points deduction was to make clubs realise there is a real and genuine penalty.
“In administration, the big losers are employees and creditors. If the deduction is not upheld, the EFL are concerned this will open the floodgates.
“You could see more clubs go into administration with the confidence that they won’t suffer anything other than the traditional corporate issues.
“There is something in administration called a ‘pre-back’ where you effectively agree who is going to buy the club back from the administrators in advance.
“That way you can sail off into the sunset flicking the Vs at your creditors. The EFL don’t want administration to be seen as the easy way out.”
In other news, Kevin Phillips lauds Sunderland coaching staff after “huge” Leon Dajaku reveal.