Trouble ahead for English football clubs, as double whammy stifles revenues and ramps up costs

Julie Palmer of Begbies Trainer, behind the new Football Distress Survey

A new Football Distress Survey has found 43 percent of clubs in the English Football League remain in financial distress, with a surge in US and Middle Eastern Ownership expected. 

The October 2022 survey, conducted for more than a decade by business recovery specialist  Begbies Traynor, has indicated that despite a 3% fall in financially distressed clubs since May this year, 31 clubs in the English Football League (EFL), are struggling. 

In the Premier League, distress has risen by 75% since March and is now affecting seven of the 20 top-flight clubs.

But hardest hit is League Two of the EFL, where 13 of the 24 clubs (54%) are showing symptoms of financial problems.  

“Clubs in the EFL are coming under financial pressure like never before as the financial effects of Covid continue to be felt and are now being exacerbated by the cost of living crisis,” said Julie Palmer, partner at Begbies Traynor.

“While clubs are having to look at virtually every area to make saving as running costs rise and the threat of falling ticket sales looks inevitable, players’ wages, by far clubs’ largest outgoing, are a cost burden that remains untouchable. 

“Spiralling energy costs are prompting many smaller clubs to think about scheduling earlier kick-off times to reduce the need for floodlights.

"Meanwhile cancelling improvements to grounds and reducing budgets for non-playing staff are measures many clubs are considering or have already put in place, triggering concerns that some grounds could fall into disrepair without financial input from the Government and the Premier League.“

Gerald Krasner, consultant at Begbies Traynor, said: “The escalating financial problems of running a football club have seen many club owners run out of steam to the extent that, behind the scenes, more clubs are in fact up for sale than we have seen for decades.

“The weak pound, combined with a growth in interest in football from the US and Middle East, are likely to trigger an increase in overseas ownership of English clubs from these two parts of the world.  

“Meanwhile many clubs are staggering on and I expect to see at least one or two clubs enter into an insolvency process during 2023”

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