Next year ‘could see football clubs going out of business’

The next year may not just be a tough one for manufacturers, small firms and retailers, as an insolvency expert has said a number of football clubs may be facing a winding up order.

Such a warning came from Brendan Guilfoyle, from the P&A Group in Sheffield, which has dealt with a number of insolvency cases involving football clubs, such as Luton Town, Leeds United, Crystal Palace and Plymouth Argyle.

He told the Businessdesk.com: “The market has changed and is getting worse; we can no longer assume we can find buyers for football clubs.”

As well as the greater difficulty in finding buyers for clubs at a time of economic strife, he suggested there can also be problems arising through a lack of transparency in negotiations between insolvency and administration practitioners and potential purchasers.

Referring to one example of this, he said: “We also need everyone to understand what could scupper a potential purchaser. At Plymouth Argyle two potential buyers withdrew because of campaigns run by fans.”

One way the administration process will need to change in the future is that “protracted” negotiations will need to be avoided, with takeovers clinched quickly or the club shut down.

Although many clubs have found themselves in extreme trouble, in administration and close to being wound up, no league club has gone bankrupt since 1992 – at the end of a recession – when Aldershot and Maidstone went to the wall.

However, clubs at various levels have come within days of extinction, including Portsmouth in 2009 and Leeds United in 2004, both of whom were Premiership clubs at the time.

The wider economic climate may have also played a part in clubs failing at other times in the past, such as the depression years of the early 1930s when Merthyr Town and Wigan Borough went to the wall.

Manchester United were also close to liquidation in 1931 before they were bought and saved by local businessman James Gibson.