Author: Guy Thomas Earlier this week, Brendan Guilfoyle, Chris White and John Russell of the P & A Partnership (an insolvency firm based in Sheffield) were appointed administrators of Crystal Palace FC. This has been well reported over the last couple of days by BBC online - click here to view . …and football fans should expect more of this type of response from the directors of struggling football clubs. Directors of struggling companies facing likely insolvency must also take into account the interests of creditors as well as their shareholders. Other stakeholders such as fans without a direct financial interest in the company often feel they are left behind by such choices. Football clubs and the directors that run them are no different to other companies in having to strike that balance. The expectation on people who have financially supported clubs through tough times to “dig deeper” can be overwhelming. As Brendan Guilfoyle, one of Crystal Palaces administrators said earlier this week, “This club has been in the spotlight for some months with creditors pressing for payments and players anxious about their wages.” He went on to explain that “Our role now is to find a buyer quickly to provide certainty for the employees, players and fans for the future. We are hoping our appointment will be short-lived as we understand there are many interested buyers.” Crystal Palace reportedly has debts of circa. £30 million. They had been listed to appear in court on January 27th to face a winding-up petition from HM Revenue and Customs over a seven figure (unpaid) tax bill. By happy coincidence, Brendan Guilfoyle a former National President of R3 (the insolvency industries professional body) had recently published a cautionary article on recent developments in “football administrations” . Whether you are a football fan or a company director of a business unconnected to football, it makes for an interesting read and I thoroughly recommend it as an insight into the running of a ongoing trading company (such as a football club) by an administrator. Please click here to view Brendan Guilfoyle’s article.
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Football Club Blues: Crystal Palace FC Enters Administration
Author: Guy Thomas Yesterday the BBC broke news of the latest claims against Portsmouth Football Club. This week it’s Sol Campbell, the short lived Notts County player who was also recently reported as having signed a new deal with Arsenal FC. Click here to view the article on the BBC. Football clubs are no different to any other businesses in the need to keep a tight rein on their finances during a recession.What is “different” about them is the intense and sometimes intrusive public scrutiny that they are under compared to other companies of similar turnover. This scrutiny applies double if the team is not perceived to be performing on the pitch or the choices of the management are not supported by the fans. “Increasingly, matters off the pitch are taking centre stage in the media’s mind as they seek to tell the full story of what is taking place on it” says Paul McGoohan, Sports Director of Square1 Consulting , who have advised a number of Premier League and Championship Clubs. “The media’s thirst for information and the emotive subject matter mean that is essential for executives to get the right message into the public domain. Good legal and communications advice can help club executives in successfully managing this process and ultimately assist in not losing the public battle.” I agree with Paul’s points above; It is a truism of a financial downturn that when a company is perceived to be “in trouble” that its troubles are doubled. It is for this reason that football clubs and their stakeholders routinely employ PR consultants to work alongside their legal team during difficult times. My top tips (below) can apply to Football Clubs, but are also transferable to any business: 1. Communicate with stakeholders and creditors concisely and accurately. 2. Don’t hide - its not going away and may get worse if you do nothing. 3. Keep on top of the “message”; if you lose control of it then you risk losing your company’s goodwill and hard fought business relationships. 4. Take advice to address the root problems. Good communications can only buy you time. Use the time wisely to address the problems behind the immediate crisis. 5. Act quickly – try to get your message in before the rumours start. Efficient communications with stakeholders and creditors engenders trust and can provide a useful foundation when the time comes to implement solutions and take your company forward.
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Football Finances: Why legal advice and PR go hand in hand
