BusinessBusiness RecoveryPremiership League FDs to increase overdrafts

Premiership League FDs to increase overdrafts

Premiership clubs have increased their overdrafts despite expecting to post profits, and are facing pressure from the banks

Nearly two-thirds of Premier League clubs have increased their overdraft in
the last 12 months, as the battle for success drives clubs to take more
financial risks, according to a survey of football FDs by PKF.

Although 69% of Premiership clubs expect to post a pre-tax profit this year,
62% have increased their overdraft facility. One-third (31%) said they were
under more pressure from their banks.

‘The fact that 62% of Premier League clubs have increased their overdraft
will be ringing alarm bells at the banks,’ said PKF head of corporate recovery
Philip Long.

‘Television money has increased, but the banks will be worried that the money
is effectively bypassing the clubs to be spent on buying, and paying,
increasingly expensive players.’

The next tier of professional football, The Championship, is also under
financial pressure.

Three-quarters (78%) of Championship clubs were not expecting to make a
pre-tax profit and 77% of FDs of those clubs said the banks were putting them
under pressure.

One-third of clubs anticipated increasing the size of their squad, but 56%
were looking to reduce the size and cost of their squad.

‘The top half of the Championship is increasing spending, undoubtedly
incentivised by the financial rewards of winning promotion,’ said PKF partner
Stuart Barnsdall.

‘However, the results suggest that more than half of Championship clubs
either believe their squad does not have the capacity to win promotion or, more
likely, are not prepared for the financial consequences of mounting a serious
but ultimately unsuccessful challenge.’

Further reading:

Leeds United’s football league entry
deadline looms

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