Nine SPFL clubs 'showing signs of financial distress' as new report lays bare risk-taking by Scottish teams
Nine clubs in the SPFL are ‘showing signs of financial distress’, according to a new report.
The October 2022 Football Distress Survey, carried out over over more than ten years by business recovery experts Begbies Traynor, revealed a 50 per cent rise in Scottish teams demonstrating signs of distress compared to March 2022.
While the Scottish league is still financially better off than its English counterpart, with more than 40 per cent of clubs are showing symptoms of financial hardship, four Scottish Championship teams are showing signs of distress, up from zero in March and 12 months ago, suggesting that clubs are taking greater financial risks in order to achieve promotion from the second tier, or avoid relegation from the cinch Premiership.
Begbies Traynor chief Ken Pattullo warned that while Scottish clubs have ‘historically been better at managing finances than English clubs in recent years’, the monetary prize on offer from reaching the top flight is causing clubs to live beyond their means.
He said: “The financial prize of the Scottish Premiership gates and TV deals, which although only a fraction of those in the Premier League, do still dwarf the revenues of the lower Scottish divisions. 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.
“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."
Pattullo believes clubs will feel the pinch even more during the winter months as fans have to make significant financial decisions, such as weighing up the cost of domestic bills with going to games.
He added: “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.”