BusinessCorporate FinanceRising debt levels trouble 80% of football clubs

Rising debt levels trouble 80% of football clubs

Survey finds that 80% of Football League clubs are concerned by levels of debt

Some 80% of Football League clubs are concerned about their levels of debt
and think the redistribution of TV revenues across the league would help ease
the problem.

Grant Thornton’s The State of the Game report, compiled with
Birkbeck’s Football Governance Research Centre, found that 83% of all clubs
remain concerned about the levels of debt they are facing (up from 79% last
year) and 22% are very concerned. Some 80% of all clubs would back a fairer
distribution of riches across all leagues.

‘The game is at a crossroads’, said professor Christine Oughton, director of
Birkbeck’s Football Governance Research Centre. ‘The Premiership is experiencing
a growing crisis, with stagnant attendances and a lack of a competitive
balance.’

Joe McLean, a football finance expert at Grant Thornton agrees that debt
remains a huge concern for clubs. ‘Despite seeing the football bubble burst with
more than 36 clubs going into administration in the last 10 years and many
others having to drastically tighten their belts, debt remains a big issue,’ he
said.

Maclean said that unless the current financial model by which the league
operates is addressed, it is too risky for clubs to plan long-term. He said the
fact that eight out of 10 football clubs believe a better distribution of
revenues would reduce risk and tackle competition indicates that the game is
destined for further difficulties unless a more level playing field is
established.

However, he said, there are signs of change: ‘Despite debt problems still
present in many clubs, the penny appears to be dropping in the minds of many
football stakeholders and clubs in particular,’ he said.

‘We are witnessing early, though distinct signs that the tide is slowly
turning away from a game made of poorly managed and unaccountable clubs and a
lack of competitive balance and moving towards better run clubs, greater
supporter involvement and crucially, greater support for a more level playing
field in terms of the financial distribution of revenues’,

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