IPs fall foul of football cases
Insolvency practitioners will be discouraged from becoming involved in football administrations because they are increasingly likely to lose money on the work, an expert has warned.
As it is common practice for IPs to take out loans to keep businesses running, and football clubs are less likely to provide a return, practitioners say their personal exposure means they actually risk losing money.
Jeremy Willmont, partner at Moore Stephens, which rescued Crystal Palace FC two years ago, said: ‘The football business is an industry that is operating on emotion, not common business sense.’
He added that insolvency practitioners cannot continue to take on jobs they are not sure will make money. ‘We will not recommend an expensive insolvency procedure if there is no money in it,’ he said.
He added many IPs were taking jobs because they were ‘blinded’ by the publicity generated by taking on clubs. But he said the difficulties of dealing with the press and worried fans made it ‘a lot of hassle for a relatively small job’.
According to practitioners, it is unlikely a club will make money in the future if it didn’t in the past and the financial crisis is likely to continue if cost of players does not diminish.
