As several football clubs start the New Year in dire financial straits, a football insolvency expert warns that failing clubs could be shut down in 2012.
Brendan Guilfoyle of The P&A Group of Companies, who has handled football insolvencies at Crystal Palace, Leeds United, Luton Town and recently Plymouth Argyle, says that it may no longer be financially viable to save some clubs.
Guilfoyle and his colleagues at P&A have created a new model for future football insolvencies following the sale of Plymouth Argyle Football Club last autumn. The deal to sell the club took more than six months and, according to Guilfoyle, “penalised players, staff and advisers”.
He says: “P&A is planning a new model that will be fairer on everyone, more realistic about the chances of saving a failing club and make the process quicker and more transparent. Plymouth Argyle fans were passionate about saving their club. As a football fanatic myself I could understand their concerns and comments. But parts of the insolvency process and confidentiality clauses made it impossible to communicate as openly with fans and others as I would have liked.
”As a result fans took to forums, blogs and other social media to complain about the process and get their messages out.”
The proposed P&A plan will focus on three key areas – no secrecy and more transparency; involving fans and other stakeholders from the start of the process; setting a month’s time limit for a prospective purchaser to come up with all necessary funds.
In a blog on whether football clubs are worth saving Guilfoyle says: “At the outset of any administration we will be realistic with everyone – fans, creditors, players and staff – spelling out exactly what the prospects are for a rescue. The market has changed and is getting worse; we can no longer assume we can find buyers for football clubs. We also need everyone to understand what could scupper a potential purchaser. At Plymouth Argyle two potential buyers withdrew because of campaigns run by fans.
“In any future administrations we won’t sign any confidentiality or exclusivity clauses – that way we can keep fans, staff and other stakeholders involved and have open discussions. It is not financially viable to have protracted negotiations so we will have a short deadline for bids from potential purchasers – probably a month. We either get the money in full for the deal – as with other business administrations – or the club will be shut down.”