Halliwell’s recovery specialist Richard Palmer on football’s finance woes
WORLD Cup fever has gripped the nation, but there are huge concerns for local football clubs.
Deloitte’s annual review of football finance showed that while revenues are holding up in the recession, operating margins continue to tighten and debt continues to rise.
Football’s finances have never come under closer scrutiny. The BBC recently uncovered the precarious position of Manchester United, and insolvency specialists Begbies Traynor say eight football league clubs are on its “critical” list.
At the local clubs, Liverpool’s parent company lost £54m in 2008-09, and spent £40m servicing debt. Chester is being wound up. Wrexham went into administration in 2004 when in League One and is now in the Conference. My club, Tranmere, is up for sale – its owner believes outside investment is needed to improve the team.
Portsmouth’s administration may see non-football creditors receive £15m of £85m owed, whereas football creditors will be paid in full to comply with league rules. HM Revenue and Customs is rumoured to have challenged the ‘Football Creditors Rule’ at the High Court, which it is on record as describing as “unlawful”.
HMRC has decided that enough is enough, and is toughening up against clubs. It wound up Chester and has issued winding up petitions against others. The future for our local clubs has never been so uncertain.
