A report by business recovery specialist Begbies Traynor has indicated a rise in the number of Scottish football clubs showing signs of financial distress.
The company’s October 2022 Football Distress Survey has concluded a total of nine clubs across Scotland are showing signs of distress, which is three more than the last survey in March.
According to the survey of Scottish clubs, the Championship has seen the highest level of hardship, with four of the 10 second-tier outfits showing symptoms of financial difficulty.
Ken Pattullo, who leads Begbies Traynor, believes the latest figures suggest clubs are taking more financial risks to get promoted, or to avoid relegation from the top tier of Scottish football.
Pattullo said: “The financial prize of the Scottish Premiership gates and TV deals, which although only a fraction of those in the (English) Premier League, do still dwarf the revenues of the lower Scottish divisions.
“Historically Scottish clubs have in recent years been better at managing finances than English ones, but there is evidence that the uplift in revenues that comes with the Scottish Premiership is starting to tempt clubs to spend more on the pitch in an attempt to secure these bigger revenue streams.”
Cost of living crisis expected to impact clubs
Pattullo believes the wearing off of financial support measures which helped clubs to navigate the Covid pandemic is also starting to show.
He feels the impact of rising costs for clubs during the winter, allied with supporters having less disposable income, will continue to impact the financial health of Scottish clubs.
He added: “The introduction of Covid relief measures and the enterprising good management of clubs saw distress levels here hit an all-time low in March this year, but the benefits of these measures now seem to be behind us and clubs are seeing increasing pressure on finances just as fans face a looming cost of living crisis.
“Clubs are looking ahead to long winter nights with high power and fuel costs, right at the point when fans’ own domestic bills are rocketing and forcing them to make tough choices as the cost of living squeezes discretionary spend.
“Even season ticket holders will have to think twice about travel costs, parking and food and drink spending, but it’s inevitable that families facing rising inflation in every aspect of their household budgets will impact the sale of match day tickets to travelling and non-season ticket fans this winter.”
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