Football clubs look to majority shareholders to fund losses during pandemic
Two-thirds of clubs relied on their major shareholders to fund last season’s losses, according to a survey.
Accounting firm BDO surveyed the CFOs of 32 clubs across England’s four professional divisions and found that 66% turned to club owners and majority shareholders in the 2020-21 season, the second campaign hit by the coronavirus pandemic.
The overall figure was up from 57% the year before and during the championship 73% of clubs needed this kind of support in 2020-2021.
The aid was in addition to other forms of assistance, including the government holiday scheme, tax deferrals and third party loans.
Twenty-two percent said their club’s finances needed attention after the 2020-21 season, reaching 36 percent in leagues one and two. Fifty percent of the entire group surveyed said their club’s financial situation “could be better”.
Ian Clayden, Head of Professional Sports at BDO, said: “During the pandemic, the only certainty in football was that clubs would look to shareholders for increased support.
“Support from the government, the leagues and the fans was also important, but it was mainly shareholders who funded the clubs during the most disruptive period in recent sports history.
“The resilience of football has been demonstrable. The appetite for English football is unwavering and its adaptability to new media channels presents a credible opportunity for a period of deep growth.
“For shareholders who have the means to move clubs forward and exploit new opportunities, there is post-pandemic optimism. There is real hope to recover some of the forced investments of the past 18 months.
“For those who now want or need to exit, there are enough green shoots to bring it down to credible exit values with a lot of value on the table for future investors.”
Only 22% said their club owners or majority shareholders were considering a partial or full sale of the club, despite continued interest from investors, especially from the United States.
The survey found that 43% of Premier League clubs surveyed had been approached by investors – 100% of that interest coming from the United States.
Clayden added: “Football is finally being seen as a real business asset class. The doors of the club are open to sophisticated and experienced investors in the sports sector – particularly from the United States, where the generation of income from the brand has been the most successful in the world – as well as to new entrants such as equity capital. investment, motivated by a realistic opportunity to tap global digital media channels.
“The inevitable caveat, however, is that the influence of sport’s broader stakeholder groups has become even more evident throughout Covid-19.
“Anyone who takes football forward will need to be aware of the need to accommodate fans, communities, regulators, etc., who will all have a say in how the business of football develops and how the finances of football. are managed and reported. “
Tracey Crouch, who chaired the fan-led review of government-commissioned football governance in April, has spoken out in favor of an independent football regulator.
The BDO survey found that only 31 percent of club CFOs supported the idea of such a regulator, and only a quarter of respondents believed that an independent review committee for club accounts would lead to more great durability.
Three-quarters of respondents believe that the existing Financial Fair Play (FFP) rules do not meet their main objective of promoting sustainability, while 59 percent do not believe that the FFP requirements have been applied consistently in their league – including 100 percent of those polled in the Championship.