Begbies Traynor : Red Flag Alert Football Financial Distress Survey (Scotland)

The latest Football Distress Survey, which has been conducted by business recovery specialist Begbies Traynor since 2012, reveals that there has been no increase in the number of Scottish clubs displaying signs of financial distress since the pandemic started.

The findings are in contrast to a continuing credit crisis among English clubs outside of the Premier League, compared with pre-Covid data.

Since March 2020 the number of clubs in Scotland showing signals of financial distress has fallen marginally from nine to just eight clubs. In the three tiers below the Premier League, financial distress is now affecting a total of 34 clubs in England and Wales, double the number before football grounds around the UK were closed in March 2020.

In England, two EFL clubs, Wigan Athletic and Derby County, have also entered administration, triggered in part by the pandemic.

"There was a significant rise in distress when we saw the last data six months ago 2021..."

Since the end of March 2021, the last time data was analysed, the number of Scottish clubs displaying signs of credit trouble has fallen by 33% from 12 to eight in the most recent period, to 30 September 2021.

"The rates relief, government-backed bank loans and other furlough measures seem to have done their job in terms of protecting Scottish clubs. There was a significant rise in distress when we saw the last data six months ago 2021, but the clubs have recovered and we're now seeing levels of distress below those in March 2020," said Ken Pattullo, who leads Begbies Traynor in Scotland.

"There's no doubt that Scottish clubs, with just a fraction of most EFL clubs' TV revenues, have had to be more prudent for a long time, and it seems that they have been better able to pivot strategies to conserve their resources, despite having more dependence on ticket sales and match day attendances," he added.

"Although we tend to envy the relative fortunes of the game south of the border, the trends revealed by this survey show that English clubs' ability to spend more freely pre-Covid has proved to be a double-edged sword. We should be thankful that the Scottish leagues won't see a whole raft of 'zombie clubs', staggering through to avoid failure and financially-driven relegations that are likely in England.

"The survey even shows small early indicators of falling credit worthiness in the Premier League, and it's a long time since that was a factor to even mention," said Mr Pattullo.