98% of Scottish football clubs ‘match fit’ despite growing North South divide in British football -Begbies Traynor

Financial distress across the leading football clubs in Scotland, which peaked in 2011 at almost 10% of all clubs, remains at a record low, according to football finance experts at Begbies Traynor following their analysis of key indicators of business distress in the sector.

The firm’s annual Football Distress Report produced by corporate recovery experts has found that just one out of the 42 clubs that make up the first four divisions of Scottish football is currently showing signs of serious distress.

Rising attendances, up by over 13.5 per cent in the Scottish Premier League, and by an average of 9 per cent across all four divisions, have helped keep the clubs liquid, and improved their overall financial health, the survey also 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,” he added.

Football distress levels peaked between 2010 and 2012 as rising wages, falling gates and flat-lining television monies combined to create pressure on many of the league’s biggest spending clubs. In England as well as 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, Premier League and Championship sides have tidied up their finances too, but there are still signs of distress within two English clubs,” said Mr Pattullo.

“The growth of our attendances particularly in the 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,” he added.

A full copy of the report can be downloaded here.