Financial Distress Levels Down Among Scottish Football Clubs

March 25, 2015

The well-publicised off-field problems of Rangers Football Club has apparently prompted improvements in financial management among the rest of Scotland’s professional football clubs.

Figures compiled as part of the Red Flag Alert Football Distress Report, compiled by Scotland Debt Solutions‘ parent company Begbies Traynor, show a fall in the number of football clubs facing serious cash flow crises to just one, and that one is not the famous Glasgow giant.

“The Rangers saga has dominated the headlines for years and recent loans from Mike Ashley’s Sports Direct have kept the club on the front pages again but Rangers isn’t technically the most financially stressed club in Scotland, as a result of the recent cash injection,” explained Ken Pattullo, a football finance expert from business rescue and recovery specialist Begbies Traynor.

In March of both 2012 and 2013, there were four Scottish clubs dealing with serious financial distress and that figure fell to three in March of last year. Now with just one club in real financial trouble, experts are suggesting that there is a greater degree of caution and prudence prevailing within football club boardrooms throughout Scotland.

“With a lack of money in the Scottish game, due largely to Rangers’ enforced exit from the SPL, and the ensuing dearth of TV money, clubs have been wisely cutting their cloth accordingly and have largely avoided splashing out on players in the last two or three transfer windows,” said Mr Pattullo

Crucially, owners of Scottish and English football clubs are increasingly taking earlier action to offset and deal with financial problems than was the case in previous years, Mr Pattullo explained.

“We are seeing clubs being offered for sale or investment ‘off market’ ahead of the critical point where the business fails,” he added.

According to the Red Flag Alert report on finances among Scottish football clubs, there is a clear desire among owners and board members at all levels to avoid being “the next big failure”. Indeed, this fear is seen as having been an important contributing factor in the stabilisation of what was until relatively recently deemed a “really dangerous situation for the sport in Scotland”.

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