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.’