Of the 72 teams in the English Football League, 33 were showing signs of financial difficulties up from 17 the year before. Insolvency experts believe some of them may go bust because the effects of the pandemic on their bank balances are yet to be “fully felt”.
Begbies Traynor says they are still afloat thanks to the Treasury’s Covid support measures such as loans and rates relief. But they have a “wall of debt” to pay, its annual Football Distress Survey reveals, when the help dries up. Partner Gerald Krasner, said Premier League cash had supplemented the government money to “ease the pain” of EFL clubs during 2020.
He said the assistance had given “much-needed extra time” to teams in the Championship, League One and League Two. But he added: “The escalating symptoms of early financial distress are a very real signal that, for many clubs, the full financial effects of Covid are yet to be fully felt.”
Begbies said no club analysed was yet showing evidence of “significant” financial pain. However, it claimed this was a “deceptively rosy picture”. Covid-related factors, it said, were cloaking an undercurrent of rising debt and financial issues that were being “pushed on to next season and beyond”.