In a previous post I claimed that the global recession has, so far, had surprisingly little impact at the top level of English football. Move down a few steps on the ladder, however, and a rather different picture emerges. Lower-league and non-league clubs are increasingly feeling the pinch, and some reports even claim that as many as six clubs in League 1 and League 2 could go into administration within the next few weeks. Stockport County is one of the clubs believed to be on the brink of administration, with large debts to the Inland Revenue.
There are two main reasons why these clubs are more vulnerable to a general economic downturn than Manchester United, Arsenal et al. Firstly, lower-league and non-league football doesn’t appeal to a world-wide audience, making clubs more dependent on revenue in Britain where the downturn is more severe than in most other countries. Secondly, smaller clubs typically do not have the long contracts with sponsors and broadcasters that help soften the blow for the big clubs. According to the chairman of Merthyr Tydfil revenue from sponsorship and other sources has fallen from £9,000 a week to less than £1,000. A drop of about 90 percent!
To make matters worse attendances at matches are decreasing. Among the 18 clubs remaining in League 2 since last season the average attendance has dropped by 7,0 percent this season according to official statistics and Between the Lines calculations. The worst hit are Morecambe (-29,6%), Chester (-25,6) and Darlington (-23,0). Darlington announced its insolvency a few weeks ago, and is believed to be £5m in debt. Only four clubs; Bury, Brentford, Rochdale and Wycombe, have increased their average attendance. This is a negative sign even if it doesn’t necessarily mean that gate receipts have dropped as some clubs might have increased ticket prices. In combination with decreasing sponsorship, falling attendances is a serious problem for those clubs that have built too expensive squads and stadiums.
Financial problems at lower-league and non-league clubs are of course not unheard of, and I couldn’t say for sure that the present situation is much worse than normal. Still, the indications are that the recession is beginning to cause some serious damage among smaller clubs.
Thanks to twohundredpercent.net and footballeconomy.com for enlightening me on this subject.
Between the Lines 