Scottish Clubs fighting headwinds affecting the wider economy but in ‘relatively good shape’ for next season – Scottish Business News

THE March 2024 Football Distress Survey, which has been conducted by business recovery specialist Begbies Traynor since 2012, has shown that there were just three clubs (7%) in Scotland’s four top leagues showing signs of financial distress, down by almost two thirds from a total of eight clubs a year ago.

The peak of Scottish football distress was in October 2020, when a total of 14 clubs showed early signs of financial distress.

The 31 March 2024 data also shows that financial distress in the English Football League is at an all-time low, now affecting just two (3%) of the 72 clubs in the EFL, a reduction of 91% since a year ago when 22 clubs showed signs of distress, and down from a record high of 34 in October 2021 according to data gathered on 31 March 2024.

Recent high-profile points deductions and ongoing investigations into breaches of the Financial Fair Play (FFP) rules, and the Premiership’s profitability and sustainability regulations (PSR), have contributed to the lowest levels of distress recorded in the EFL in the 12 years that the data, which shows key signals of financial distress in the companies that own and operate English and Scottish League clubs, has been published.

“Historically our clubs have been insulated from some of the spending pressures of those in the English leagues, but every business in the UK has been impacted with similar trends in rising costs, from energy and wages to food and other operational expenses,” said Ken Patullo, who leads Begbies Traynor in Scotland and Northern Ireland. 

“Compared to the wider economy, the football industry is in decent shape, although the data does show an increase, up from just two clubs showing distress in October 2023 to three clubs in March. However seasonal pressure on cash flow and the timing of season tickets and other annual receipts typically account for the rise. 

“There is obviously a gulf between the revenues of most Scottish clubs and their English counterparts, but that also means we don’t have the pressure to compete in an ever-rising wage market. We have only just seen some control gained in those leagues by the more common use of penalties and consistent enforcement of regulations in the Premier League and Championship in particular.

“Scottish clubs that still have the cost of Covid loans, and who are competing for a dwindling discretionary budget in most households, will continue to see a challenging environment next season, but from a position of generally better fiscal management in the Scottish leagues, it should hopefully be business as usual for most clubs,” he added.