IT SAYS a lot about the financial side of football when the chairman of a team who are top of the First Division announces that he may quit the club if they are promoted.

Yet, this is precisely what Portsmouth boss, Milan Mandaric, did. It is a salutary reminder of the chasm that exists between English football's top two leagues.

The Serbian millionaire has pumped more than £20m into Pompey since he took them out of administration in 1999, yet feels as though he may not have the necessary cash war chest for his club to survive in the big league. The away clash against Manchester United in the FA Cup may lead to a change of heart.

But looking at the positive side of an essentially depressing announcement, it does show that there is life after administration. Recently, York City became the latest football club to seek an administration order, the path most commonly tread by financially troubled or insolvent football entities.

But administration doesn't mark the end of the football club as supporters at Portsmouth would testify. Indeed, it is the method preferred by both the Football League and the Football Association for rehabilitating clubs because it allows both organisations to assist in getting the club back on its feet.

Over the past six months, the Football League has become adept at providing clubs with advice regarding administration and the realistic likelihood of trading through it. This is because a club's survival is dependent upon its membership of the league; without such, it is not permitted to play.

Once a court makes an administration order, the club is given breathing space during which it must attempt to sort out its financial affairs. The breathing space does not usually come with a specific time limit; administration can last a few months or run to several years. What this effectively means is that an administrator and officials at the club prepare a business plan to which they attempt to adhere. During the time in which they try to implement the plan, the court protects the club from its creditors.

However, matters can get quite hairy if a club goes into receivership. Receivers are appointed by creditors who have a charge over a club's assets; their role is to recover money owed to the secured creditor by selling off the club's assets. However, one factor which ensures that receiverships are not the common currency of football club insolvencies is bad publicity. No one wants to be remembered as the company which closed club x or y down.

When all else fails or if there is no viable alternative, a club can be liquidated or "wound up" which means that its assets are either sold and the proceeds distributed between creditors or the assets themselves are distributed.

For most businesses, this would signal the end of the road, but football is a peculiar business. In many instances, with the express blessing of the Football League and the FA, clubs have been allowed to resurrect themselves with a new corporate identity.

For many clubs considering the current fate of Port Vale or Leicester, the most realistic financial option may be a supporter's trust.

When a club goes into administration, the supporters are usually consulted by the administrator, although in law there is no reason why they should be. This is because supporters have been instrumental in financing proposals to bring clubs out of administration through the formation of trusts, which can buy the club from the administrator.