Football League clubs could face insolvency crisis say experts

The ban on football fixtures could cause an insolvency crisis which will hit Football League clubs hard, warn experts at Begbies Traynor.

Published: 16th March 2020

Football League clubs could face insolvency crisis say experts
  • More clubs face ‘going to the wall’
  • Major crisis for local football clubs and match day suppliers
  • HMRC must take a tolerant view on VAT and PAYE for smaller clubs

The ban on football fixtures could cause an insolvency crisis which will hit Football League clubs hard, warn experts at Begbies Traynor.

Paul Stanley, regional managing partner for Begbies Traynor in Manchester, said:

"Cashflow through the turnstiles is what keeps football clubs afloat. It's the pies, pints and programmes sold at the matches that pay the wages. More clubs may go to the wall and too many are teetering on the brink already.

“More will follow Oldham Athletic and Bolton Wanderers into trouble. Make no mistake, it's a major crisis. Finance directors and club owners may need to restructure and react swiftly to survive. 

"Clubs may be able to negotiate payment terms with HMRC for PAYE and VAT as the Government has indicated it will take a sympathetic view on cases caused by the virus. Similarly, landlords and financiers may decide not to take draconian actions due to adverse publicity and the fact that any court would, in my view, take a sympathetic view to any company’s honest attempt to keep its business afloat when faced with a pandemic when abiding by the decisions made by governments and ruling bodies.

"That said, it is not clear whether sponsors and TV companies, now not able to show matches, will be willing or contractually obliged to make payments to the various leagues when their own advertising revenues will fall if events aren’t taking place. The leagues then won’t be able to pay the clubs who in turn will struggle with paying wages. This may not be a problem for today but in a few weeks’ time it could become an issue. 

“When the current situation is under control, the long term effects on the global football economy should be minimal but there will inevitably be some fall out in the short term and I'm particularly concerned about smaller Football League clubs." 


About the author

Paul Stanley

Regional Managing Partner

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Paul qualified as a chartered accountant in 1987 with Arthur Andersen an international accounting practice. He worked on audits, management consultancy and buy out due diligence before specialising in insolvency and investigations. In 1990 he was granted an insolvency licence by ICAEW.

He worked on the Robert Maxwell private company administrations in the Middle East in the early nineties and developed strong banking relationships. In 1993 he joined up again with ex-Andersen's colleague Ric Traynor as Ric's first partner in the firm which later changed its name to Begbies Traynor. Paul acts as managing partner in the Manchester office and sits on both the firm's management and technical committees. He has a reputation as a straight-talking, honest advisor who is both technically strong and commercial.

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