SPL clubs resigned to losing money next season

Most Scottish Premier League clubs expect a drop in income next season, according to a study into the impact of the credit crunch on football.

Most Scottish Premier League clubs expect a drop in income next season, according to a study into the impact of the credit crunch on football.

PKF's annual survey of football club finance directors found revenue had dropped over the last 12 months in a variety of different income streams.

And clubs face increasing demands from HM Revenue and Customs to pay tax liabilities on time.

Charles Barnett, a partner in PKF's Football Industry Group, said: "What our latest survey shows is that, not unexpectedly, Scottish football has been affected by the economic downturn as banks are reluctant to lend; supporters are less able to spend; and new sponsorship has largely dried up.

"Clubs have found that all of their sources of income have been reduced and there may be more problems to come.

"Our survey found that the majority of SPL clubs were expecting further falls in all revenue streams in the coming year and were anticipating further deterioration in their income.

"This is in contrast to the English leagues where one third believes that the economic downturn will have no impact in the 2009/10 season.

"But unemployment has yet to peak and its impact on ticket sales, merchandising and catering income will be unavoidable for the majority of clubs.

"It is unlikely therefore that financial improvement will occur before the 2010-2011 season and even that will be dependent on the performance of the wider economy."

Three-fifths of SPL clubs reported a decline of less than 5% in ticket sales. The same amount reported a decrease in merchandising of up to 20% with a further 20% reporting an even sharper decrease.

Catering income dropped by up to 20% in most SPL clubs with corporate hospitality and season-ticket sales also dropping in the majority of clubs.

"There is also growing evidence that HMRC is looking at the financial activities of football clubs and moving quickly to collect overdue payments and ensure that debts are not allowed to accumulate," Barnett added.

Four-fifths of SPL clubs questioned admitted they were reducing the size of their first-team squads in the wake of Setanta's collapse.

Barnett concluded: "Our survey found that the biggest financial concern for SPL clubs is the fall in TV income, which is not surprising as the survey was carried out in early June at the same time as the problems with Setanta began.

"Other concerns include loss of income due to relegation; the inflexibility of player salaries; the ability to attract sponsorship; and season ticket pricing.

"It is hard to remember a time when Scottish football faced such a range of serious issues affecting its future.

"There are signs that many clubs are tackling their debt issues and reduced income but this is difficult given the widespread downturn in the economy."