By Tony Attwood
As things stand, two professional football clubs in England are banned from signing any new players: Hull City and Sheffield Wednesday. That might not concern us as Arsenal supporters but at any moment that number could rise, and then rise again.
The reason of course is that both clubs owe money to other clubs, who need the money to pay other clubs, who need the money to… well, you see what I mean. The Telegraph writer said “fears grow over the financial stability of the Championship club”. But he could have left out that last word, because the whole of professional football is built on clubs paying their debts on time.
It never used to be like this of course: clubs used to pay each other for the players they bought at the moment the player signed, but as prices rose the idea of deferred payments came in, as clubs gambled that they would either get a lot more gate money in because this player was going to make all the difference, or because they were now going to sell someone else to balance the books.
Obviously that didn’t always work out but there was always a very rich owner or even a bank that would support the shortfall for a while.
But increasingly prices of players have escalated, the desire for success has become ever more desperate, and owners have turned up whose source of finance is, to say the least, somewhat obscure, what with them being foreign and all. For some of these people, the notion of owning an English league club was a matter of prestige back home, and they hardly bothered with results. It was the owning that was the thing.
But now talk involving chickens and roosting comes to the fore, and Hull City now find themselves bracketed with Sheffield Wednesday in terms of not being allowed to do any transfer deals until some of the past debts have been sorted out.
And therein lies the problem. Those two clubs owe money not to the local supplier of burgers in the club take-away but to other football clubs, who, very oddly owe money to other clubs who …
And worse, the sanctions clubs come under at a moment like this merely make things worse. If all they can do is sell players, they will do so to clear their debts and almost certainly sink down the league table. That will lead to crowd shrinkage which leads to less money. They can’t buy anyone new, so relegation beckons and crowds decline further. Fewer and fewer players want to play for such a club, so the standard goes down. Fans who pop in for some games but not all, begin to feel resentful and stop coming.
Following this further stage payments to other clubs are not made, and the ripple effect of bad debts goes on – an inevitable consequence of buy now pay later which has come to dominate football.
Now the fact that Hull City owe around £1m to Aston Villa for a loan fee for Louie Barry looks utterly ludicrous both for Hull and for Villa who surely had to do due diligence to see if they would actually get their money. Especially when we think back to the table at the end of last season… Luton Town in 22nd place descended to the third tier, you may recall.
| Team | P | W | D | L | F | A | GD | Pts | |
|---|---|---|---|---|---|---|---|---|---|
| 21 | Hull City | 46 | 12 | 13 | 21 | 44 | 54 | -10 | 49 |
| 22 | Luton Town | 46 | 13 | 10 | 23 | 45 | 69 | -24 | 49 |
So they survived on goal difference having come seventh the season before. And while pondering such a decline we might remember that Leicester City gained promotion in 2023/24 and are now back down and are themselves once more in real trouble with the authorities, For as we have mentioned they (Leicester) have three charges against them over profitability and sustainability rules during their last Championship season, and for failing to submit accounts on time.
And so we see problems grow – and each one has a knock-on effect, as a club that is reliant on another to pay its debts so the first club can pay its debts suddenly finds the whole chain of payments collapsing.
In football terms Hull can survive by signing free agents but they have to find the free agents and convince them they will get paid, for there is no guarantee that a company in debt will be allowed by its bank to keep borrowing to pay salaries. What the bank wants to know is, “When will we get our money back?”
Now it used to be said that banks would not foreclose on clubs because of the bad publicity that would bring but that is no longer an issue – banks no longer care about such matters – they care more about their own profits.
There is no doubt that Acun Ilicali who owns Hull City FC has put a load of money into the club – but that won’t help him or the club – what people want is debts paid and more money put into the club. Having finished seventh in the league two seasons ago the decline to missing relegation on goal difference has come as a shock, and rescuers are not riding over the horizon.
But the big fact remains, when one club fails, it affects a dozen others, and if two of them are teetering on the brink, that takes them down which then affects…. well you know how it goes. And what makes it even worse, if that were possible, is that the EFL is saying it has not received all the financial information that it has asked for, and that doesn’t look good either for the next punishment is a three-window transfer restriction exactly as has been imposed on Sheffield Wednesday. And the trouble with that is that it will take the clubs ever further down the league, and reduce crowds further and then….
The statement from Acun Ilicali that, “We don’t have financial problems. It’s true “we are spending too much money,” may have satisfied a few journalists but didn’t really tell us anything we didn’t know, nor did. “The club has loans, but those loans are to me. I will not ask for all the loans.”
And as we keep pointing out, if one club falls, there is bound to be a knock-on effect.
