By Harry Mottram: If professional football clubs were treated like any other business most would go bust tomorrow as their loans were called in. In fact around half of all Football League teams have gone into administration in the past dumping debt, not paying staff and defaulting on loans. Despite their cavalier attitude to company accounts only a tiny number have disappeared after declaring themselves bankrupt.
April 1st 2025 is the start of the new financial year foe everyone – and the looking at the books of football clubs is an eye opener. Everton have lost money every year for seven years with a staggering £570m in losses and yet are building a new stadium at a cost of around £750m. Manchester United owe half a billion pounds and also proposed to build a new stadium at a cost of double or more than that. Manchester City only owe £65 million – small change to these clubs. Lower down the leagues York City lost £235m last season, Salford City lost £5.3m while Stockport County lost an eye watering £7m.
North of the Border Caledonian Thistle are still in the throws of trying to remain in business as a club despite being insolvent with a debt mountain of around £4m. This for a club that sees under 2,000 spectators for homes games. The administrators have failed to find a buyer due to being so far unable to get creditors to agree a CVA (company voluntary arrangement) due to the numbers of shareholders and investors with nobody in a strong position to force a CVA plus legal issues over the ownership of the club’s carpark.
It is a sorry state of affairs that none of the top flight in professional football or rugby union are solvent. In the rugby premiership three clubs collapsed and are in the throws of trying to resurrect themselves. Wasps, Worcester and London Irish collectively still owe £30m between them. London Irish plan to return to competitive rugby under a fan ownership model in 2026 after a consortium bought the club out of administration last month. Worcester are still hoping they can restart playing rugby but the new owners talk of developing the Six Ways stadium to include a hotel, multi-storey car park and restaurants and bars – but that seems some way off while nobody has kicked a ball in months at the site. Wasps likewise remain the wilderness with no rugby but plans of a new beginning in the SE of England.
No Premiership Rugby Union Club is debt free and the league almost imploded last year as the RFU won’t allow promotion of Championship clubs to fill the gaps due to their grounds not having large enough capacities. Bath Rugby have put in planning to redevelop their ground which lies on a public park which they don’t own – and if agreed with the council would cost upwards of £100m – even though they can barely cover their costs now.
Ian Carrotte of ICSM said the usual business sense goes out of the window when directors take charge of a club. He said: “There’s a disconnect between the aspirations of the club and its supporters and the financial realities. Time and again clubs invest in new players in the expectation they will bring success in terms of increased gates and more TV money. If the likes of Glasgow Rangers, and Manchester United cannot balance the books with their global following and billions in marketing and TV cash then there is no hope for the likes of Caledonian Thistle. Sport needs a rethink with Rugby Union and lower level football teams being realistic. Fans don’t mind watching the team lose and struggle as long as they are there. Better to be solvent and still have a club than go bust – and leave the suppliers, players, staff and backers out of pocket.”
The ICSM CEO gave this advice to potential suppliers to clubs: “If you decide to trade with a club then don’t go in too deep, stick to your payment terms of 30 days maximum and be prepared to suffer if they go bust. It’s best to be a supporter of the team as at least that way you could argue you have invested in the club and could solve your conscience that way if the worst happens. My advice is treat clubs like you would any other business – and don’t let them fob you off with late payments.”
Pictured is the new Everton Stadium – picture credit Everton.
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ICSM CREDIT
For information on ICSM visit www.icsmcredit.com or call 0844 854 1850.
ICSM, The Exchange, Express Park, Bristol Road, Bridgwater, Somerset TA6 4RR. Tel: 0844 854 1850. www.icsmcredit.com. Ian.carrotte@icsmcredit.com