The recession has hit hard on many people, but Football clubs are yet to really feel the bite.
Football League Chairman Lord Mawhinney today has said that Football just has to wait until the recession will make an impact.
10 clubs face the possibility of going into administration and will therefore lose 10points. Those 10 points could ruin a dream of promotion that would bring added cash, or a threat of relegation that would see fewer spectators.
If teams can hang on till the end of the season it could change there fortunes around.
Take the example of Luton, Bournemouth and Rotherham. All had points deducted at the beginning of the season, luckily Bournemouth and Rotherham have now caught up but Luton are still behind.
Bournemouth has had points deducted from them twice and overall have lost 27 points due to there finance. The club had debts of £4 million.
Most recently the club faced a winding up order but £33,000, owed to Magic Solutions Limited, has been paid by a local philanthropist, Adam Murry. The club now want to move on and have a few potential owners. That’s a luxury most other clubs don’t have.
Cheltenham Town have put there entire squad up for sale, and have had a loan of £100,000 from the local council. They have managed to cut £8,000 from there squad wage costs. With the market getting worse before it can imagine to start getting better, more clubs will feel the pressure
FA Chairman Lord Triesman has also voiced his concerns with the excess amount of debt by saying: ‘‘Football is obviously carrying a pretty large volume of debt. People will be making business judgements about whether it is sustainable or not, but it is carrying quite a large volume of debt. Those debts will either have to be paid or there will have to be a re-financing deal, and re-financing deals inevitably mean that you package up debt in smaller blocks as people try to minimise the risk.’’
Many other lower league clubs have had there problems as the money seems to stay in the top league due to its popularity across the country and world.
Lord Mawhinney now believes though that it won’t be long until the top leagues see the recession on there doorsteps. West Ham and Portsmouth are both up for sale still but no offer has been made for the clubs due to no one buying at the moment. Mike Ashley had Newcastle up for sale but couldn’t find a potential buyer to match his selling price.
The team I support, Swindon Town have been in administration three times. We were 20 minutes away from liquidation until a director, Sir Seton Wills, paid us out of trouble. If the 10 point deduction rule was in when we were in administration, we probably wouldn’t be in the football league. Now we have the luxury of a financially sound chairman and board of directors who are keeping us a float.
Sadly I think it won’t be long till we see football clubs disappearing.
Links:
http://news.bbc.co.uk/sport1/hi/football/7965152.stm
http://news.bbc.co.uk/sport1/hi/football/teams/b/bournemouth/7547284.stm
http://news.bbc.co.uk/sport1/hi/football/teams/b/bournemouth/7937545.stm
http://news.bbc.co.uk/sport1/hi/football/7656862.stm
http://news.bbc.co.uk/sport1/hi/football/teams/c/cheltenham_town/7953055.stm
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