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Thursday, 29 March 2012

Bradford Bulls need £500,000 to avoid administration

It's not just football clubs that get into trouble with HMRC

The Bradford Bulls, the rugby league team, have to raise £500,000 by the 6th April in order to pay HMRC and avoid administration.  The super league team have struggled financially for many years as they do not have a wealthy benefactor.  However in a desperate plea to their season ticket holders they have already raised £100,000.   The club has blamed the Royal Bank of Scotland for pulling their overdraft facility without warning meaning they couldn't pay their tax bill.  Err but really the fact that they have racked up a massive bill for PAYE might be the real reason for their demise.  HMRC are expected to issue a winding up petition if it is not paid. 

We have recently put some pages up about why football clubs tend to get into trouble and the reasons that a rugby club is facing similar problems is not that surprising.  However, the Super league does not have the same power as the "football creditors rule" that ensures that all the players will be paid ahead of other creditors but it will have a big say in  any restructuring as it has the power to grant franchises to clubs that allows them to play in the league.

So what is the likely outcome?

The club is likely to go into administration if it can't pay the first tranche of money but if it can then it may propose a company voluntary arrangement to allow it to buy more time.  Even if the club does go into administration then it may exit the process by a CVA as a way to keep going.

Millionaire businessman and Guiseley AFC benefactor Steve Parkin has previously spoken to the Bulls and is understood to be on the club’s radar again as a potential investor.

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