Low TV income, but soccer club finances improve

The annual Football Distress Report by corporate recovery experts Begbies Traynor has found that despite “meagre” television contracts north of the border, just one out of the 42 clubs that make up the first four divisions of Scottish football is currently showing signs of serious distress.

Financial distress at Scotland’s football clubs, which reached almost 10% of all clubs in 2011, has been all but eliminated, according to the football finance experts and analysts at Begbies Traynor.

Rising attendances — up by over 13.5% in the Scottish Premier League and by an average of 9% across all four divisions — have helped keep the clubs liquid, and improved their overall financial health, the survey found.

“To say that no clubs will fail in future isn’t possible, but what we can see is that despite the flat lining TV revenues that have barely risen in real terms in almost two decades, the game is in far better financial health than it was five years ago,” said Ken Pattullo, who leads Begbies Traynor in Scotland.

“The vast majority of clubs are financially fitter, they are managing their incomes better and are less likely to fail, but it isn’t a boom time for the clubs and they are very certainly the poor relation to those south of the border.

“Relegation, poor management and other financial factors could still bring other clubs into trouble, but it is far less likely now than it has ever been before, despite a growing gulf between the fortunes in English and Scottish football.”

Begbies Traynor said football club distress levels peaked between 2010 and 2012 as rising wages, falling gates and flat TV income combined to create pressure on big spending clubs.

In England and Scotland, clubs burdened with debt were living beyond their means, and UEFA stepped in with the Financial Fair Play rules to govern spending by boards and safeguard clubs.

“With the huge additional TV incomes, (English) Premier League and Championship sides have tidied up their finances too, but there are still signs of distress within two English clubs,” said Pattullo.

“The growth of our attendances particularly in the (Scottish) Premiership that saw the return of Hearts and its loyal fan base is welcome, but all the divisions saw an uplift which is really good news.

“South of the border, attendances are almost static, with just a one percent rise, but the TV payments in England that dwarf those in Scotland more than compensate,” added Begbie.

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Mark McSherry
Dalriada Media LLC sites are edited by veteran news journalist Mark McSherry, a former staff editor and reporter with Reuters, Bloomberg and major newspapers including the South China Morning Post, London's Sunday Times and The Scotsman. McSherry's journalism has also appeared in The Washington Post, The Guardian, The Independent, The New York Times, London's Evening Standard and Forbes. McSherry is also a professor of journalism and communication arts in universities and colleges in New York City. Scottish-born McSherry has an MBA from the University of Edinburgh and a Certificate in Global Affairs from New York University.