Written by: Keith Tully
Reviewed: Wednesday 25th March, 2015
The number of English football clubs facing financial distress is down by 63 per cent this year as compared with last, according to a comprehensive look at the state of play at clubs around the country.
Figures compiled as part of the Begbies Traynor Red Flag Alert Football Distress Report show that there are only three clubs currently dealing with financial distress, a figure down markedly from the eight seen as seriously struggling in March 2014.
Furthermore, the broader financial trends among English football clubs appears to be positive with the number of distressed clubs in 2015 well down on the 13 recorded in March 2012.
“The national game was in intensive care for some time in this country, but the measures introduced by the Football and Premier Leagues, as well as sound business management, have made great strides towards safeguarding its future,” said Gerald Krasner, a football finance expert from the business rescue and recovery specialist Begbies Traynor.
“What is different to a few years ago is that owners are taking action earlier where there are problems,” added Krasner. “We are seeing clubs being carefully offered for sale ahead of the critical point where the business fails, which is the best way to keep the problems in the boardroom and off the pitch.”
Other factors seen as having had a positive impact on the way English football clubs are managed from an accounting perspective include the introduction of Financial Fair Play policies and greater scrutiny of whether potential club owners are ‘fit and proper’ persons.
According to Krasner, there is also a growing appreciation among figures within the football industry as a whole that financial problems should be taken seriously and dealt with early wherever possible.
Another positive trend seen in recent years in this context is “more stability at the very top of the sport”, with Premier League football clubs apparently now coming under far more scrutiny when it comes to their financial dealings than was the case even a few years ago.
Premier League clubs are currently prohibited from making losses worth in excess of £105 million in any of the next two seasons, with stiff penalties and points reductions the potential consequences of falling foul of these new financial stipulations.