Liverpool administration a “catastrophic” possibility

Liverpool's chairman Martin Broughton gestures as he takes his seat before their English Premier League soccer match against Arsenal at Anfield in Liverpool, northern England, August 15, 2010.   REUTERS/Phil Noble (BRITAIN - Tags: SPORT SPORT SOCCER) NO ONLINE/INTERNET USAGE WITHOUT A LICENCE FROM THE FOOTBALL DATA CO LTD. FOR LICENCE ENQUIRIES PLEASE TELEPHONE ++44 (0)

Liverpool chairman Martin Broughton has admitted that the chance of the club falling into administration next week is possible, and warned the effects of that would be “catastrophic” to the football club.

Although technically the club would not enter administration as it is a profitable and solvent company, its parent company, Kop Holdings – owned by Tom Hicks and George Gillett, would. This is likely to incur Liverpool a nine point deduction in the Premier League, and deter investors from the club.

Hicks and Gillett have until next Friday, 15th October to pay back the £280million owed to the Royal Bank of Scotland. However, the club are hopeful a High Court case against the current American owners will push through the £300million sale of the club earlier in the week.

But the possibility that Liverpool FC will enter administration is certainly something fans should be braced for.

“It [administration] could happen, yes,” Broughton told the Daily Telegraph .

“This is all part of why it is important that we made the decision on Tuesday to accept one or the other of the two very acceptable bids. Heading for administration was a very likely outcome if we didn’t.

“Even now with the court case looming, administration cannot be ruled out. It is not inevitable, and I am not going to start giving percentages of how much it is possible. That is why we are going to court to clarify our position on the sale of the club, and we have to win in court, and we will win in court.”

“Going into administration needs to be avoided at all costs, as the negative impact would be catastrophic,” he said.

“Setting aside the nine-point deduction, it would have an impact on Liverpool’s value and be wide open to predators, whereas we have what we believe is the right new owners to take the club forward.”