Gary Sweet has poured cold water on reports that Championship clubs were talking about a ‘nuclear option’ of all going into administration in a bid to manage their finances during the Coronavirus shutdown of football.
The Hatters chief executive does believe the game needs to ‘reset’ when it emerges from the pandemic, but that the immediate aim is for clubs to survive for an unknown period of time without any match-day income.
Reports emerged earlier this week that suggested Championship clubs are discussing a process known as group administration, which has been called the ‘nuclear option’. It would involve all 24 clubs, including Luton being placed into administration on the same day, with all players becoming free agents. Owners would then buy back the club and renegotiate player contracts.
However, the Hatters have painful memories of such measures, after being placed into administration three times in the space of nine years during the first decade of the century. It ultimately led to the club’s 30-point penalty that saw them slip into the Conference after 89 years in the Football League.
Sweet was a key player in the last two administrations, as a supporters’ trust chief that helped wrestle control from former owner John Gurney and then by leading the 2020 consortium that acquired the club in 2008.
He said: “In all of the meetings and conversations I’ve had with Championship clubs in particular, the word ‘nuclear’ has never been mentioned, so I don’t quite know where that’s come from.
“Absolutely, we, as clubs, see this as an opportunity to reset football and there are lots of opinions going around between clubs particularly at the moment about how that rest should take place.
“Certainly, the EFL will be thinking that too, and I’m sure the Premier League will probably be too. That is one of the positives that could potentially come out of this, but there is no point in resetting if football or clubs can’t survive, and that is the one thing we need to take care of right now.
“It’s how we get through the next few months, as a football family, because this isn’t about ultimately Luton Town’s survival. There is no point in Luton surviving if nobody else does. This is actually about the community of football thinking about the reset tomorrow, but literally surviving for today.”
Sweet has previously said that the current crisis will lead to clubs going “to the wall.” And while Luton have one of the lowest playing budgets in the Championship, it still accounts for more than half of their cost base.
Negotiations are underway with players over pay cuts to help ease the financial burden of football’s indefinite suspension, but due to Football Creditors Rule, should any club go into administration any players’ wages would still have to be paid in full.
Sweet said: “I think that’s particularly unpalatable at the moment, particularly given that HMRC falls behind that, and when you’ve got the situation where HMRC or the Treasury itself is bailing out, to some degree, businesses and football, through the JRS (Job Retention Scheme) scheme and the business loan scheme.
“I think it’s only right that they are the first ones that are paid back in due course.
“There will be clubs go into administration, undoubtedly. I think there were a couple of clubs quite close last month. I think the end of April is going to be very difficult for some, and every month that goes by without income will get worse unless there is some kind of saviour that comes in and saves the day for clubs outside the Premier League.”
