As it is common practice for IPs to take out loans to keep businesses running, and football clubs are less likely to provide a return, practitioners say their personal exposure means they actually risk losing money.
Jeremy Willmont, partner at Moore Stephens, which rescued Crystal Palace FC two years ago, said: ‘The football business is an industry that is operating on emotion, not common business sense.’
He added that insolvency practitioners cannot continue to take on jobs they are not sure will make money. ‘We will not recommend an expensive insolvency procedure if there is no money in it,’ he said.
He added many IPs were taking jobs because they were ‘blinded’ by the publicity generated by taking on clubs. But he said the difficulties of dealing with the press and worried fans made it ‘a lot of hassle for a relatively small job’.
According to practitioners, it is unlikely a club will make money in the future if it didn’t in the past and the financial crisis is likely to continue if cost of players does not diminish.
The second largest improvement in ‘significant’ levels of financial distress since the EU Referendum was in professional services, found research from Begbies Traynor
Steve Absolom and Will Wright from KPMG Restructuring have been appointed joint administrators to City Motor Holdings and associated companies
Partners from Johnston Carmichael have been appointed as joint administrators to Axon Well Interventions Products UK
Begbies Traynor have been appointed administrators of William Anelay Ltd, York, one of Britain’s longest-established construction and heritage restoration companies