To compound the above, clubs are out of favour with the stock market, which closes the door to a valuable source of income. So who in their right mind would leave a job in industry to become the finance director of a football club?
Any FD must be committed, if not passionate, about their business, but none more so than in football. As our survey shows, 78% of FDs support the club that employs them. Most companies fight a constant battle to retain customers but football benefits from an incredibly loyal customer base. FDs have been criticised by fans for selling high-value players, but the ability to securitise future income streams is now possible and likely to become a powerful source of finance.
There is a real indication the sport’s popularity will continue to grow and TV viewing figures are unlikely to dwindle. The industry is talking about how much BSkyB will offer to renew its rights to live premiership games when the contract expires at the end of the 2003/04 season. Many believe it will offer less, while others believe the offer may be the same since its subscriber base is underpinned by premiership devotees.
The position regarding equity finance has been grim, but the fact that shares in clubs have dropped by an average of 40% over the past year combined with the perception that clubs are beginning to deal with their finances, may result in equity investors returning to the game. But most of this only relates to England’s premiership ‘elite’.
The English Division One suffered a huge financial shock following ITV Digital’s collapse and the future remains uncertain for many Nationwide League clubs. In Scotland, the Premier League struggled for a good TV deal, and with Motherwell currently in administration and Clydebank insolvent, many Scottish clubs face tough financial decisions.
- Stuart Barnsdall is a partner at PKF football services group.