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How The Corporate Insolvency and Governance Act 2020 Is Helping Struggling Football Clubs

How The Corporate Insolvency and Governance Act 2020 Is Helping Struggling Football Clubs
Friday, 21 May 2021 By Richard Barham

When the coronavirus pandemic hit in Spring 2020, and the remainder of the 2019/20 football season was put on hold, there were widespread predictions of multiple football club insolvencies.  In fact, since then, there have been very few (only Wigan Athletic and Bury have entered administration in that time), even though a number of clubs have been making, and continue to incur, significant losses.[1]  

There are probably a number of reasons for that:

  • The support that has been given by the Government including the furlough scheme which has been used by a number of clubs, principally clubs outside the Premier League but also four clubs in the Premier League.
  • Clubs managing their costs more carefully in the pandemic.
  • Clubs perhaps being in a better financial position than historically, partly given the financial fair play rules introduced over recent years.
  • The impact of the Corporate Insolvency and Governance Act 2020[2] (CIGA).

This article examines the last of these reasons, explaining what CIGA is and how it is relevant to the solvency of football clubs. Specifically, it looks at:

  • Background and CIGA’s changes to insolvency laws
    • Wrongful trading
    • Filing of winding-up petitions
  • Outlook and impact for football clubs

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About the Author

Richard Barham

Richard Barham

Richard heads both the London Corporate practice, and Sports practice, of Dentons.

Richard's focus is on M&A and corporate work.  He is particularly interested in corporate governance issues, and regularly advises companies and other organisations on how they best operate to achieve good and effective governance standards.

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