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Thursday, March 23, 2023

Insolvency rules «advantage» for ailing clubs

Berlin – sports economist Daniel Weimar sees the relaxed bankruptcy sanctions in German football as an opportunity for clubs that have been financially strained for a long time.

If a club is structurally over-indebted, “the best time to organize the bankruptcy is now,” said the scientist from the Chair of General Business Administration at the University of Duisburg-Essen to the “Tagesspiegel”. “Because the sporting consequences are now breaking down, this could be an advantage for all clubs that have recently taken high risks.”

In the case of bankruptcy applications, there are no sanctions this season after a decision by the Bundesliga clubs in the general meeting of the German Football League. The designated nine-point deduction is suspended and reduced to three points for the coming season. The German Football Association also laid down this regulation for bankruptcy cases in the 3rd division and the five regional leagues. As the “kicker” reported last, 13 of the 36 professional clubs – including four first division clubs – are threatened with bankruptcy this season due to the corona pandemic.

Due to legal regulations, there could currently be a good time for sailing clubs. «Until now, it was considered that in the event of foreseeable insolvency, an application for bankruptcy had to be made within three weeks. Now there would be time until September 30th, »said sports economist Weimar. “That is why the clubs can currently communicate openly that they are actually insolvent. Insolvency proceedings would have been opened automatically before Corona, but this is no longer the case. The clubs could now set the schedule themselves. »

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Amanda Graham
Amanda Graham
News staff at The Eastern Herald. Writing and publishing news on the economy, politics, business, and current affairs from around the world.

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