English football clubs facing financial distress drops by 50 per cent
The financial health of English football appears to be improving, with the number of clubs in the EFL deemed to be facing distress halving since last year.
Only three of the 72 teams in the English Football League, which comprises the three professional divisions below the Premier League, meet that bar, according to an annual survey carried out by insolvency practitioners Begbies Traynor.
“We’re finally starting to see the trickledown effect of the huge revenues in the upper tiers of the English football pyramid, and the clubs feeding them with new players are enjoying academy revenues, as well as new fans and income from the growth of the women’s game,” said Begbies partner Julie Palmer.
“Investment in academies has raised the sheer numbers of talented kids getting access to professional coaching, and has lifted the level of players in the lower leagues, as well as delivering the Premier League’s stars of the future.
“With many academy players now getting a chance to play in Leagues One and Two, and develop into valuable talent later, the lower league clubs that sign and nurture these players early in their careers can benefit from big pay days if their market value climbs drastically after a few years as a professional.”
Regulator likely to increase trickledown to EFL
The data suggests a steady improvement, with the number of EFL clubs facing distress down 25 per cent in the last six months. One of those remains Sheffield Wednesday, for whom Begbies is currently acting as administrator.
It comes as the Independent Football Regulator begins its job of improving the sustainability of the English game. One of the watchdog’s chief tasks is to hasten a new agreement on how the Premier League redistributes its billions in annual income to the wider game.
“The downward trend of distress generally is welcome, and the trickledown of revenue to the lower league clubs is a big part of the new regulator’s remit,” Palmer added.
“We expect moves by him that would facilitate further progress in coming years as he gets to grips with the disparity between the richest and poorest clubs.”
