Coventry warned over administration

The Football League have confirmed that cash strapped Coventry City would have to pay all their football creditors in full and honour players' contracts if the club goes into administration.

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Going into administration effectively gives a football club breathing space by allowing it to stop paying its debts while an administrator is appointed to re-order the company and find someone to take it over.

But it still employs the playing staff and contracts have to be honoured, as do payments to other clubs for players they may have bought.

Each of the 72 clubs has a share in the Football League and when a club goes into administration, that share is suspended.

In order to come out of administration, a club has to get its share back which is the final stage of the process.

But to do that it has to satisfy a Football League Board that all football creditors have been settled in full or that existing arrangements are being honoured, and show that the club has complied with all the administration rules.

So whoever takes over the club will have to honour the contracts of the existing staff.