FINANCIAL CRISES AT THE HEART OF SCOTTISH FOOTBALL

The latest report on the state of Scottish football suggests that four Scottish clubs are in severe financial distress. The insolvency practitioners, Begbies Traynor, publish a regular review of Scottish football finances. Begbie Traynor LogoLast October, the firm claimed that six of the clubs in the top three divisions were struggling. Its latest figures suggest a slight improvement; but it still underlines just how vulnerable and fragile Scotland’s football clubs have become.

The firm uses a range of public documents to assess the clubs’ financial health. The warning signs it looks for include court actions such as high court writs and winding up petitions. It also includes clubs with serious negative balances in their accounts and others which were issued with striking off notices for late filing of accounts. Just this week, Dunfermline Athletic said it had applied to go into administration to prevent it being wound up over an unpaid £134,000 tax bill; and within the past year, both Kilmarnock and Hearts settled bills after threatened with winding up orders.

Begbies Traynor provide little detail over which Scottish clubs are in trouble. It also doesn’t say if any of the clubs it’s concerned about now have featured in previous year’s reports. But it does point out that Scotland is not alone in facing a football crisis. In England, it points out that clubs outside the Premier League are facing similar issues; partly as a result of falling attendances at their games.

Ken Pattullo of Begbies Traynor
Ken Pattullo of Begbies Traynor
Ken Pattullo, head of Begbies Traynor in Scotland, said that “…after a number of well-publicised club failures here in Scotland it was widely accepted that a sea change was needed in the way clubs approached their finances. These survey results show that while clubs have started to address their financial management issues, the same worrying levels of distress are present as there were a year ago, but the game has coped with the disruption that the Rangers administration caused last year.”

He pointed out that the vast majority of clubs had coped with the ‘Rangers effect’ that saw the average gates in the Scottish Premier League fall by almost 30 per cent after the Glasgow club was sent to the Third Division. Indeed, the figures suggest that there’s been an increase (5%) in the number fans going to matches in the top four divisions, and that, said Mr Pattullo, “is great news for the future of the game in Scotland.

“That said,” he added, “there are still four clubs facing serious if not necessarily terminal financial problems, and we expect to see more difficulties in the coming year. Overall, the finances of Scottish football clubs have remained similar to a year ago, and have dramatically improved since six months ago in October, when historically the clubs have most of their cash reserves. This is a welcome trend and we hope that clubs can make further progress over the summer and into next season.”