A forgotten cost
Posted by John Beech on July 9, 2009
When a club goes into Administration and an Administrator is appointed, that Administrator has to recover his own costs from what monies he can raise from the club’s assets. Administrators do not come cheap.
Begbies Traynor are very much the stars of the football insolvency business – very much Champions League material in this particular business sector.
Clubs at which they have been appointed the Administrators include: Kingstonian (2001), Huddersfield Town (2003), Northwich Victoria (2004), Wrexham (2004), Farnborough Town (2006), Crawley Town (2006), Bournemouth (2008), Halifax Town (2008) and Southampton Leisure Holdings (2009). Gerald Krasner, one-time Chairman of Leeds United, has been one of their ‘star players’.
They have just announced annual profits of £7.2m, a jump from £5.7m in the previous financial year (1). Insolvency is of course a boom industry in times of recession.
For use in presentations I have a rather complex diagram showing the main cash flows in the football industry. It could just be that it needs an extra arrow, representing the flow of cash from clubs to insolvency practitioners.