Scottish clubs remain in the same level of financial trouble as last year, according to a study.
It comes after Dunfermline applied to go into administration to avert being wound up over an unpaid £134,000 tax bill. Eight first-team players have been made redundant as the Fife club reduced its wage bill. The Begbies Traynor survey found that four clubs in the top three divisions are struggling, down from six identified in October but at the same level as last March.
The business analysts said the results come at a time when clubs are at their weakest having spent the majority of their season-ticket, sponsorship and television revenue as the season nears its end. The Clydesdale Bank Premier League and Irn-Bru League Division One have seen a fall in average attendances this season compared to last, contributing to financial problems.
Ken Pattullo, partner in Begbies Traynor, said: “After a number of well-publicised club failures here in Scotland it was widely accepted that a sea change was needed in the way clubs approached their finances. These survey results show that while clubs have started to address their financial management issues, the same worrying levels of distress are present as there were a year ago, but the game has coped with the disruption that the Rangers administration caused last year.
“The fall in distress levels in the past six months even comes despite a fall in average attendances overall in the top three divisions, and shows that the vast majority of clubs have coped with the ‘Rangers effect’ that saw the average gates in the Scottish Premier League fall by almost 30 per cent.”
According to the study, the warning signs of financial problems include serious court actions against clubs, including winding up petitions and high court writs; clubs that have been issued with striking off notices for late filing of accounts; and those with serious negative balances in their accounts.
In the last year Kilmarnock and Hearts settled bills when faced with the threat of winding up orders. Pattullo said: “Overall there are actually five per cent more fans going to matches in the top four divisions, and that is great news for the future of the game in Scotland. That said, there are still four clubs facing serious if not necessarily terminal financial problems, and we expect to see more difficulties in the coming year.
“The Rangers relegation has sent average attendances in division three through the roof, as expected, with average gates up by over 1,000 per cent, but of course the majority of this benefit is felt by the Ibrox club. Overall, the finances of Scottish football clubs have remained similar to a year ago, and have dramatically improved since six months ago in October, when historically the clubs have most of their cash reserves. This is a welcome trend and we hope that clubs can make further progress into next season.”
Begbies Traynor found English clubs outside the Barclays Premier League are in a similar state to Scottish clubs, with falling attendances troubling clubs south of the Border.