Publication featured in Accountancy Age
Seven UK professional football clubs were issued winding up petitions in 2023 – the highest figure since 2020 – as financial pressures intensify*. Football clubs that have been issued winding up petitions in the past year include Coventry City, Southend United and Taunton Town.
Among the financial pressures football clubs face are high interest rates, which have made debt more expensive for football clubs. Many professional football clubs built up large debts during the pandemic as a result of curtailed ticket sales. Some clubs have been unable to repay their creditors or meet their tax obligations with HMRC.
Football clubs have also been struggling with spiralling inflation, particularly in employee salaries and energy costs. Some clubs have increased ticket prices in an effort to stabilise their finances, however such measures have broadly proved insufficient. The current financial pressures are particularly causing smaller clubs to struggle, for whom ticket sales account for a higher proportion of their income.
Brian Carey, partner in our Kent offices, claims: “Covid had the double impact of slashing football clubs’ income while causing their expenses to balloon. The Covid pandemic is long gone but the financial impact on football clubs still lingers. Many clubs were forced to take on large amounts of debt to stay afloat during the pandemic and high interest rates made servicing this growing debt increasingly expensive.”
“Smaller football clubs have been hit the hardest. While they have far smaller wage bills than larger clubs, they also typically have far less lucrative sponsorships and television rights. For these clubs, lost ticket revenue has proved very hard to replace through other revenue streams.”
“With the cost-of-living crisis continuing to curtail individuals’ spending power, there is a limit to how much cost can be passed onto the fans. Football clubs that have raised prices too fast have seen fewer punters through their doors.”
“Consumer spending is now recovering – albeit slowly. If this trend continues and interest rates start to come down, the financial pressures on football clubs will be significantly reduced.”
*Data provided by HMRC shows that seven football clubs had winding up petitions filed against them, the highest number since 2020 – with ten winding up petitions against football clubs. 2021 and 2022 both had fewer than five winding up petitions filed against football clubs.
