Crunch season looms for football debtors
With the new season about to kick off, Alex Miller looks at the financial issues affecting the game and assesses which clubs are best placed to stay competitive in the long term.
Football has been eclipsed by the Olympics this summer, but as another season gets under way, there are still as many reasons to watch events unfold off the pitch as financial continue to affect the sport.
Portsmouth FC has dominated headlines this week, for all the wrong reasons. The club narrowly avoided going into liquidation before the season started after all their senior players finally agreed to leave the club.
Administrator Trevor Birch from PKF set a deadline for every senior player to be off the wage bill; failing that he would have closed Pompey down.
Portsmouth will start this season in the npower League One with a 10-point deduction due to the club’s latest spell in administration. Hopes now rest with a £1.45m takeover bid from the Pompey Supporters' Trust after former owner Balu Chainrai dramatically withdrew his bid to buy the club on Monday.
Other clubs in financial jeopardy include Darlington, Stockport and Kettering - these are the clubs most likely to fall foul of tax related-debts and are desperate to avoid following the likes of Chester, Gretna, Rushden & Diamonds and Halifax in folding.
Newcastle United became the latest top-flight side to settle its HMRC-related disputes earlier this year. The club agreed to settle all outstanding disputes with the taxman, mostly relating to the payment of image rights to its footballers. Chelsea also released information in its annual accounts revealing that it paid £6.4m to HMRC following a dispute over image rights payments to players, on which the tax department argued PAYE and national insurance were legally due.
Premiership clubs in general have improved their financial positions after reaching agreements covering past liabilities and future treatment of payments - or embarking in conversations with HMRC to find solutions.