BusinessCorporate FinanceFootball FDs: in a league of their own

Football FDs: in a league of their own

Some of the results of PKF’s annual survey of football club finance directors

Football is a closed industry. Clubs seeking to gain entry into the football
league are fully aware of the rules that have operated very successfully for a
number of years. The industry makes the rules and if you want to join, then you
have to abide by the system that looks after its continuing members.

A recent change to the rules is that you have a 10 points deduction if you go
into administration. The rule came in last year and it first applied to Wrexham,
sealing their relegation.

We don’t see the super creditor rule changing because football is really the
last bastion of the trade union movement and in effect a ‘closed shop’. It has
to be said that as regards its members, it has been run very well. As insolvency
practitioners operating in the football industry, we have always had to play by
that rule.

PKF’s annual survey of football club finance directors, due to be published
this month, found that 52% of respondents were in favour of football clubs
losing their super creditor status, showing a fairly even spread of opinion (45%
were against it, with 3% not stating a position either way).

The attitude towards players was more clear cut, however, with 66% of finance
directors who responded believing that players should lose their status as super
creditors, as opposed to just 24% against and 10% abstaining from comment.

We have come out of the halcyon days of the ITV Digital contract, which had
clubs paying huge contracts to players. More recently there has been a reality
check as regards both the amount of money paid to players as well as the length
of contract commitments.

There are also far fewer transfers where clubs could be owed money for a
player. These days, players are either on loan or transferred for free and as
such there is far less indebtedness between clubs for deferred transfer fees.

Generally football clubs have taken great strides to improve their
housekeeping and as such we see the super creditor priority rule being less of
an influence going forward than in previous years.

Philip Long is head of corporate recovery at PKF

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