At its meeting today, the Board of The Football League reviewed the report of the independent forensic accountants commissioned by The League to examine the circumstances at Southampton Football Club, together with external legal advice as to the interpretation of The League's regulations.

The report, by Grant Thornton, set out in detail the various inter-relationships between the four different group companies at Southampton Leisure Holdings Plc (the Holding Company). The conclusions were based both on the content of the annual accounts published by the Holding Company, which include the Club, and other information made available to Grant Thornton as part of their enquiries. The Board noted that Grant Thornton reported that toward the end of their enquiries co-operation with them was withdrawn.

The report concluded, among other things, that:

1.The Holding Company has no income of its own; all revenue and expenditure is derived from the operation of Southampton Football Club Limited (SFC) and the associated stadium company.

2.The Holding company is solvent in its own right. It only becomes insolvent when account is taken of the position of SFC and the other group companies.

3.The three entities (the Holding Company, SFC and the stadium company) comprise the football club and they are inextricably linked as one economic entity.

In light of all this advice, the Board concluded that an administrator had been appointed in respect of the Club or part of its undertaking or assets. Accordingly, it was left with no alternative other than to invoke its 'Sporting Sanctions' regulations and apply a 10 point penalty to the Club. The other provisions of The League's insolvency policy also become effective.

As the insolvency event occurred after The Football League's deadline of the fourth Thursday in March, the points deduction will take effect either:

1.In the current season, if Southampton avoid relegation to League 1;

or season, if the club does not avoid relegation.