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One in 10 football clubs under ‘severe financial pressure’ 28 May 2014

With the FIFA World Cup just a fortnight away, research has found that one in 10 English football clubs are under “severe financial pressure”.

The Begbies Traynor Red Flag Alert Football Distress Report found a 33% increase on the number of financially troubled clubs since the survey was last carried out in September 2013.

The research found a total of eight clubs, one in nine of the 72 clubs in the Championship and Leagues One and Two, are suffering from serious financial distress.

The 2013/14 football league season was the first to take place under new ‘Financial Fair Play’ rules, where clubs filing losses of more than £3m, plus a further £5m if guaranteed by an owner, could be punished by transfer.

Football finance expert, Gerald Krasner of Begbies Traynor, said: “The end of the season is always a more telling time for the underlying financial health of football clubs that tend to pull more cash in during the second half of the year as season ticket, sponsorship and television payments land.

“To see levels of critical distress rising is never welcome, and it would be a surprise if one or more of these troubled clubs avoided administration, sale or a comprehensive restructuring over the closed season.”

Already in 2014 several football clubs have encountered financial difficulties, with Leeds United, Bristol City, Hereford United, Dundee United and Heart of Midlothian all having experienced a type of insolvency or restructuring process this year.

Earlier this month, former Premier League footballers David James and Chris Sutton were declared bankrupt.

 

 

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