BusinessBusiness RecoveryFresh insolvency fears hit football

Fresh insolvency fears hit football

Football clubs are facing a fresh threat of insolvency as the transfer market collapses, exacerbating the financial strain placed on clubs by the closure of ITV Digital.

Link: Ipswich Town joins football casualty list

On Monday, Ipswich Town became the third club to call in administratorssince the transfer window closed. Ipswich joined Port Vale and York City, which were declared insolvent in December.

Administrators at Deloitte & Touche said Ipswich was a well-run club, but had run into difficulties after losing around £15m when it was relegated. It was then unable to sell players to make up for the shortfall.

York City faces a similar situation. The club was expecting to sell star player Russell Howarth for about £250,000, but in the end only managed to raise £25,000. And experts say this is only the tip of the iceberg. They expect to become busier now the transfer window has been shut.

Football insolvency expert Matt Dunham, of RSM Robson Rhodes, said he was surprised there were not more football insolvencies.

He explained: ‘The income of clubs has halved but their costs – like the lease of the stadium and the cost of players – remains fixed. There is only one major buyer of television rights, so they are unable to increase the price of the contracts.

‘Added to that, the price of players has gone through the floor because clubs need to cut costs and therefore cannot afford to buy players.’

Related Articles

Carillion CFO blew whistle over 'sloppy accounting' months before collapse

Business Recovery Carillion CFO blew whistle over 'sloppy accounting' months before collapse

3m Alia Shoaib, Reporter
Toys R Us UK and Maplin enter into administration after failing to secure buyers

Business Recovery Toys R Us UK and Maplin enter into administration after failing to secure buyers

3m Alia Shoaib, Reporter
How to avoid a Carillion collapse

Business Recovery How to avoid a Carillion collapse

4m Russell-Cooke
Carillion collapse: The week so far and industry reaction

Business Recovery Carillion collapse: The week so far and industry reaction

4m Emma Smith, Managing Editor
Kingston Smith & Partners appointed trustees in bankruptcy of ex-Newcastle United footballer

Business Recovery Kingston Smith & Partners appointed trustees in bankruptcy of ex-Newcastle United footballer

4m Emma Smith, Managing Editor
Carillion: PwC appointed as special managers – what happens now?

Business Recovery Carillion: PwC appointed as special managers – what happens now?

4m Emma Smith, Managing Editor
Investment firm acquires Avon Steel Company Limited

Business Recovery Investment firm acquires Avon Steel Company Limited

5m Emma Smith, Managing Editor
Manchester law firm enters into administration

Business Recovery Manchester law firm enters into administration

5m Emma Smith, Managing Editor