Club In Crisis - Warning Signs

FSA's head of governance Ashley Brown highlights some of the signs that might suggest your club is heading for trouble.

There’s a list of common traits we have seen at clubs who have fallen into financial difficulties, administration, or worse. Taken on their own each could be entirely innocent – but put them together and they can be indicators that a club is spiralling into crisis.

The rumour mill

There’s little that football fans love more than a good rumour. Normally, it’s of the next transfer target or a potential new manager if the team’s in a rut. They are, by and large, completely harmless. While you should treat all types of ‘I heard from a mate that…’ speculation with a hefty pinch of salt, stories of financial issues will leak out or be whispered by those in the know before they become common knowledge, or reported in the media. If rumours of shaky finances become persistent, it may be worth doing a little bit of digging.

Changes at Companies House

Thankfully for fans, a lot of the significant changes of the financial setup of a club will be reported via Companies House. Accounts need to be published here, and any additional directors or share capital that’s injected are reported here too. It may be worth familiarising yourself with your club’s records, and those of your owners’ other companies, to see if anything unusual is going on. Has a training ground been sold? Has a new mortgage or any new debt been placed on club assets? Are there new directors, and if so, what’s their history?

Earlier than usual ticket sales

Just about every club has an earlybird discount of some sort with their season tickets, and we encourage fans to take advantage of them, where they can, to get the most bang for their buck. But earlier and earlier ticket sales could be an indication of cashflow problems. If your season ticket renewal is hitting the doormat or inbox a month or two earlier than usual, ask yourself if it’s necessarily good news. Could it be that it’s the behaviour of an owner who is trying to get as much money in as soon as possible to pay off creditors and make it to the end of the season? Are they trying to get money in the door now as bills are due, with no idea of how to pay the bills six months down the line?

Delayed accounts and delayed meetings

Accounts are rarely delayed because the club’s suits have asked for an extension to count up all the money they have on hand. Delayed accounts, along with delayed payments to suppliers and local businesses, could be a sign that all is not well with the running of the club. If fans’ forums and AGMs are delayed or cancelled, it may be the club are looking to avoid tough questions too.

Unpaid wages

Delayed payments to club staff and players are a huge red flag. If cashflow is becoming such a problem that people can’t be paid predictably at the end of the month, it serves as a pretty good indicator of big problems ahead. Late payments are often explained away by bank glitches or transfers of assets not being cleared in time, but ask yourself how likely it is that there was a genuine mistake with a process that has run every month without a problem until now, and whether it’s more likely that there isn’t enough money to go around?

Swapping pitches for courts

The final and most glaring signal of all is the involvement of the taxman. HMRC are not backwards in coming forwards to issue winding up proceedings or court action to get the money that they (and by extension, you, the taxpayer) are owed from football clubs. If HMRC are taking court action you can usually rest assured that the sums involved are significant and that the problem has been ongoing for some time.

The chairman writing on the club website

This rarely ends well. Communication from the top of the club is to be lauded, but when an owner feels he/she has to air their dirty laundry and start ranting in public, often against the wishes of the club’s media team, and without spell checks and the usual professional filter, it’s often a sign of malaise at the top.

What can we do?

If you suspect that your club is falling into crisis, there are some steps that you can take. First things first, check out the guidance for fans of crisis clubs that we produced earlier this summer.

• Use it as an opportunity to engage with the club – through a fans forum or democratic supporters group, or an AGM, you have the chance to put your questions to those in charge. The club could surprise you and be receptive to supporters getting involved and raising funds.
• Identify key stakeholders – sponsors, local media, and local politicians can all be helpful in raising awareness of problems and getting answers to questions you want to know. Start making friends in high places.
• Prepare yourselves – if the club don’t engage and you think it’s likely that the club could falter, follow our checklist and get organised. If the worst comes to the worst and the club falls, it’ll be supporters who pick up the pieces.