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20% of Football League clubs in "financial ill health" 2 April 2012

One in five Football League clubs are showing signs of “financial ill health”, a report by Begbies Traynor has found.

The Red Flag Alert Survey – which monitors business distress levels – found that 13 of the 68 clubs (19%) plying their trade outside of the Premier League are not on a stable footing.

Meanwhile, according to Begbies, just 1% of UK businesses in general are showing symptoms of distress.

Overall, the clubs in financial jeopardy include three from the Championship, six in League One and a further four in League Two.

It comes after the high-profile administrations of league clubs Port Vale and Darlington, not to mention the collapse of Scottish giants Rangers.

Partner at Begbies, Gerald Krasner, who is currently handling the administration of Port Vale, warned:

“Football as an industry also suffers from an enormous financial gap between the Premier League and the Football League.

“One effect of this disparity is that Football League clubs are often tempted to overspend on players to try to gain promotion, and the promised riches and prestige that come with it.

“While Premier League clubs are guaranteed huge television money every year and some have extremely wealthy backers, there are signs of genuine financial distress among a significant number of football league clubs.”

The survey took into account clubs facing serious court actions, winding-up petitions, high court writs, striking off notices, county court judgments and ‘serious’ negative imbalances on their books.

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