Football set for another season in red

Link: 2004 football finance survey

The number of football clubs in administration in recent seasons has reached double figures. And according to the third annual Accountancy Age/PKF football finance survey, two thirds of club FDs questioned from across the top three English and top two Scottish leagues do not expect to make a profit over the next 12 months.

This is 10% more than last year, when football was reeling from the collapse of ITV Digital.

Premiership clubs are predicting a healthier season ahead ð but 78% of Football League Championship clubs and 83% of Scottish Premier League clubs forsee a pre-tax loss this year.

Following the spate of administrations, the findings reflect a greater appreciation by clubs of the poor financial situation they are in, according to Bryan Jackson, corporate recovery partner for Scotland at PKF.

Last year, nearly one in five of those asked was unable to say whether a profit would be made, while this year no-one was uncertain about their circumstances.

‘This is a sign of clubs waking up to reality,’ said Jackson. ‘They know they must be realistic in their budgeting and stop chasing the Holy Grail.’

The survey of 33 FDs shows that clubs are starting to manage their debts better. Less than a quarter had to extend their bank facility in the last year, while over half do not expect to use their full facility in the coming season.

Debts are three times more likely to have director or shareholder guarantees than two years ago and the use of the controversial ‘sale and leaseback’ method for player purchases, which caused Leeds United so many problems, is on the wane.

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