Football finance experts have warned of a rise in “zombie clubs” as a result of Covid-19 restrictions slashing teams’ income.
The number of English clubs in financial distress doubled from 17 to 34 in the six months after stadiums closed in March 2020, a new report by insolvency firm Begbies Traynor found.
Derby County and Wigan Athletic have both entered administration since the start of the pandemic, in part due to its effect on revenue.
Although teams have been allowed to admit fans again this season, it has had little effect outside of the Premier League, and further shutouts look likely.
“The rates relief, Premier League payments and furlough measures did prevent a slew of clubs going to the wall in 2020, and with the exception of Derby County there hasn’t been significant change in the credit worthiness of the clubs in the last six months, but that means the return of fans hasn’t been a magic bullet either,” said Gerald Krasner of Begbies Traynor.
“That we now have twice as many clubs in peril, in addition to the failures of Wigan and Derby County, should be concerning to fans and governing bodies alike.
“These have been exceptional times and perhaps there is an argument to be made that they may require exceptional remedies or exemptions in future if the game isn’t to see a whole raft of ‘zombie clubs’ staggering through to avoid deductions and financially-driven relegations.”
Krasner, a former chairman of Leeds United who helped sell Wigan out of administration in March, said even England’s biggest clubs were showing signs of financial strain.
“We are even seeing small indicators of falling credit worthiness in the Premier League, and it’s a long time since that was a factor to even mention,” he added.