The number of English football clubs facing financial difficulties has more than tripled in the last six months, but overall football finances are improving, according to research from Begbies Traynor.
The firm's twice yearly Red Flag Alert Football Distress Survey shows that in the Championship and divisions one and two of the Football League, 10% of clubs are showing financial distress, up sharply from October when the number was just 3%. However, the number of distressed clubs has fallen since March 2012, when 19% were displaying signs of potential failure.
Begbies Traynor partner Gerald Krasner said: 'Clubs may well be making improvements in housekeeping and good financial management in advance of the of UEFA's new financial play regulations. That said, as well as the well-publicised issues at Portsmouth and Coventry, there are at least five other clubs struggling to keep their heads above water.'
The survey results also indicate that financial problems among Scottish football clubs are getting better. Four clubs (13%) in Scotland's three top divisions currently show signs of financial distress, compared with six clubs in October 2012, the same number as when the survey was first carried out in March 2012.
Ken Pattullo, Begbies Traynor partner, said: 'After a number of well-publicised club failures here in Scotland it was widely accepted that a sea change was needed in the way clubs approached their finances. Levels of distress within football clubs have actually fallen since the peak of last year's problems in October, and this positive trend counters the seasonal peak of pressure on clubs' finances that usually comes in the spring.'
Business distress levels, as measured in the survey, comprise a range of significant financial problems that include clubs with serious court actions against them, including winding up petitions and high court writs; clubs that have been issued with striking off notices for late filing of accounts; those with county court judgements against them; and those with serious negative balances on their balance sheets.
Begbies Traynor's figures show that just 2% of UK businesses show such pronounced symptoms of distress and football clubs continue to record levels five times higher than the average business.
