Jack Frost and the threat to club finances
Posted by John Beech on December 9, 2010
Last Saturday’s football programme was considerably more than decimated (1, and then follow the ‘see also’ too), at least to a language purist. Although the Premier League and Championship programmes were largely maintained, very little football was played lower in the pyramid. The impact of this financially should not be underestimated.
Even though games will postponed rather than cancelled, clubs can expect a reduction in revenues as most games will be moved from a Saturday fixture to a mid-week fixture. This leads to a lower level of attendance by non-season ticket holders and corporate hospitality users, and hence a reduction in revenues.
If the bad weather keeps up, we can expect to see more clubs revealing their financial weakness.
More critically for some clubs is the immediate financial hit on cashflow. Clubs that are living day-to-day financially may well be depending on Saturday’s gate money to settle pressing debts, or at least to keep pressing creditors such as HMRC sweet. Among the clubs I would rate currently as under financial pressure are Plymouth Argyle (1), Sheffield Wednesday (2), Welling United (3), and Windsor & Eton (4). Their situations will hopefully resolve themselves, in varying degrees, with the finalisation of takeovers or the further injection of cash by current owners, but the longer this takes the more critical the postponement of games will be. Any club in a CVA is likely to be on a tight budget too, and hence vulnerable to the volatility of cashflow.
I’ve seen few estimates of how long individual English clubs are likely to suffer (and it’s obviously a function of upcoming weather too), but I did not that Morton, up in Greater Glasgow, is concerned about the possibility of a two-month delay before resuming their published fixtures (5).
If the bad weather keeps up, expect more clubs to reveal their financial fragility.
Histon can be added to the list of clubs with serious cashflow problems (A).