Mark Fry and David Hudson of Begbies Traynor have been appointed administrators. Mark Fry said on Thursday night he had received 'a good half-dozen' approaches for the club, which is now formally up for sale.
Under Football League regulations, clubs who go into administration incur a deduction of 10 points. But Southampton are hoping to avoid a ten point deduction because it is their parent company, not the club itself, which has gone into administration. Southampton Leisure Group plc is in administration, but Southampton Football Club Limited is trading as normal.
Under current Football League rules this loophole means the south-coast outfit, who would face certain relegation, will avoid the penalty normally handed to clubs who run into similar financial difficulties. The Football League is due to discuss the issue at a meeting next Tuesday, but as things stand cannot apply the standard sanction because the club itself is not in administration.
According to Deloitte, about £7 in every £10 of turnover is paid out to players in the Premier League and Championship.
Bankruptcy experts suggest that clubs in the Championship and, in particular, the lower leagues, are the most vulnerable because, in the absence of the substantial media rights income enjoyed by top-flight teams, they are heavily reliant on gate receipts, which are expected to dip sharply next season.
"If we don't find a buyer for the club there is a very, very high probability that it will not last until the end of the season. Realistically it will mean the end of the football club," Fry said.
"It's a very different economic climate from two years ago and football clubs have fallen as hard as anything. It's a difficult task but we will search very hard for a buyer. I would say that anyone looking to buy the club will find it a lot cheaper than it would have been two years ago."
DLA Piper restructuring and insolvency partner Michael Fiddy is acting for Begbies Traynor. DLA has previous experience acting on football club insolvencies, having advised on the administrations of Portsmouth Football Club in 1998 and Leicester Football Club in 2002. Fiddy was also previously managing director of Fulham Football Club.
Matt Barker of Clarke Willmott is acting for the club.