Structural fragility persists among UK lower league sports clubs

There is growing structural financial distress among lower-league clubs in the UK’s three most popular sports – football, rugby league, and cricket. The root causes of financial fragility are increasingly consistent. Clubs can appear stable on the surface but remain highly exposed to short-term shocks because liquidity buffers are thin, due to business models that depend on uninterrupted external funding and inflexible operating costs. 

As the sports industry becomes more global and sports fans’ interests shift, fans have increasingly focused on the highest-profile global clubs, tournaments, and sports. For lower-league UK sports clubs, this trend represents an existential financial risk. Smaller clubs often try to compete with peers with greater resources. This encourages profligate spending on higher player wages and transfers, putting pressure on payrolls and cash reserves and prompting clubs to take on more debt. Weak governance and regulatory sanctions can worsen problems. Often, these strategies end up pushing clubs towards HMRC arrears and loan covenant breaches that culminate in High Court winding-up petitions and, sometimes, in liquidation. 

Football

Begbies Traynor’s more recent Football Distress Survey, dated 31 October, found that financial distress among lower league football clubs has moderated somewhat. Only three of the English Football League’s 72 clubs (4.2%) are currently in financial distress, the survey shows, 50% lower than a year ago, reflecting improved income flows and a trickle-down effect from the top of the pyramid. However, falling headline observable distress does not equate to club-level financial resilience.

Fair Game, a coalition of club directors, supporters and politicians, assessed 164 UK football clubs across seven leagues in its 2025 Fair Game Index (FGI), scoring them on financial sustainability, governance and transparency. It found that in the top four divisions, 92 clubs are taking “big financial risks”, with 43 holding less than one month’s cash to cover operating costs, while only 5% of 2024/25 Premier League clubs can fund three months’ wages from reserves. Governance was also found to be weak, in relation to board independence and transparency, leaving many clubs vulnerable to an unexpected financial shock.

Effectively, clubs have recovered from the pandemic, but if gate receipts or income from owners were to fall or stop then the rug would quickly be pulled out from underneath them.

Football administrations

There were two noteworthy football administrations in the second half of 2025. In July, Morecambe Football Club (MFC) was suspended from the National League and was not allowed to start the 2025/26 season due to delayed wages, HMRC arrears, stadium safety concerns and financial instability. The sale to Panjab Warriors in August stabilised finances; however, by December, the club’s co‑chairmen resigned, citing the club “haemorrhaging” key staff. The case reveals how governance issues frequently persist into new ownership structures and the scale of the task ahead for the IFR, which was established in September to address these weaknesses. And in October, Sheffield Wednesday entered administration.

The IFR’s big challenge

Beyond poor management, the two football cases show how club owners can fall into a trap – unable to sell due to valuation gaps with prospective buyers, and unable to keep funding the gap between rising costs and falling revenues. Two recent events underscore the scale of the governance challenge. In early December, a consultant involved in Morecambe’s takeover was sanctioned by the UK Government over alleged terrorism‑related activity, forcing the club and new owners to distance themselves publicly. Separately, Josh Wander, the 777 Partners co-founder behind the failed Everton takeover attempt in June 2024, has been charged in the US with defrauding lenders and investors, underscoring the vital role of forensic due diligence in club takeovers, including tracing the source of funds. Moreover, clubs with a reliance on a single wealthy owner often creates a single point of failure which can mask weaknesses in governance, cash-flow discipline and risk management. 

Rugby League 

Rugby’s financial crisis is entrenched and at risk of further deterioration. Recent analysis found that all 10 English Premiership Rugby clubs recorded losses for a third consecutive year in 2023/24, with six classified as balance‑sheet insolvent, surviving only because owners continued to inject cash. 

These financial realities reflect deep structural weaknesses. Rugby has struggled to convert its strong global profile during marquee events – notably Rugby World Cups and British & Irish Lions tours – into a consistently valued domestic club format. The UK rugby league is financially sustained by World Rugby distributions and public subsidies rather than self-supporting revenues. Research shows rugby’s audience is relatively old and ageing compared to other sports, limiting growth in domestic attendances and media rights revenues at a time when wages and operating costs continue to rise. The following case studies illustrate how these pressures translate into acute financial failure.

Salford Red Devils

Salford Red Devils entered liquidation in early December with around £4 million in outstanding debts, including £500,000 in HMRC arrears, and £3 million in annual operating costs. A consortium led by Dario Berta acquired the club in February 2025. However, the new owners failed to provide credible proof of funds, triggering 10 months of sanctions, fines, points deductions and worsening on‑field results as financial distress deepened. 

The Rugby Football League (RFL) imposed a strict £1.2 million “sustainability cap” on the squad, which limited player selection and contributed to an ignominious 82-0 drubbing at St Helens on the opening day of last season. The club’s financial struggles spilled onto the pitch, as failure to pay wages triggered a player exodus that contributed to the Salford Red Devils losing 24 of 27 games in 2025 and finishing bottom of the Super League. After four court adjournments to allow the owners to demonstrate proof of funds, the High Court finally ordered the 152‑year‑old club into liquidation. The episode has raised serious questions over how rigorous the RFL’s fit‑and‑proper tests were. Fans are now pursuing a “phoenix club” solution under RFL review, with a decision expected on 17 December.

Featherstone Rovers

Featherstone Rovers has applied to enter administration ahead of a High Court winding‑up hearing. The West Yorkshire rugby league club has severe cash‑flow problems and nine winding‑up petitions that stretch back over a decade. In May 2024, Investec Asset Finance issued a winding-up petition, followed by HMRC proceedings reportedly relating to around £120,000 of tax arrears. In a statement, the club acknowledged it was “unable to trade its way out” of its debt burden and had “no choice” but to seek an administration order to adjourn the winding‑up petition and allow professional advisors to restructure the business.

Halifax Panthers

Halifax Panthers faced similar pressure in 2024, with two HMRC winding‑up petitions over unpaid tax and player and staff wages. The interim chair appealed directly to fans for financial support. When local sports clubs fail, the impact ripples through local communities, hurting local businesses, hospitality, transport, leisure and retail. Clubs at risk of insolvency can face pressures by local suppliers to pay upfront, which further adds to cash flow strains. 

Cricket

County cricket’s finances are acute but less visible. The ‘big three’ clubs – Surrey, Lancashire, and Warwickshire – generate around 44% of total league income, research shows. They benefit from larger stadiums and diversified attendances from hosting Championship matches, T20 formats, and regular international fixtures. They also benefit from commercial operations – from corporate hospitality to conferences and non-matchday events. 

Most other clubs lack these advantages and have little control to improve their primary revenue streams. These consist of funding from the England and Wales Cricket Board (ECB), which accounts for about half of their total income, and match-day revenue, which has declined in recent seasons. Smaller county clubs have limited local commercial demand for corporate hospitality use of their venues and do not host international fixtures, which restricts revenue and the ability to build cash reserves. Meanwhile, fixed costs – such as player wages, utilities, pitch maintenance and regulatory compliance – are all climbing. Ultimately, without ECB funding, many county cricket clubs would be at risk of insolvency.

In 2025, the ECB raised around £520 million by selling equity stakes in The Hundred franchise, with several first‑class counties reportedly relying on the windfall to overcome immediate financial distress. However, without much tougher rules and scrutiny over how those distributions are used, the windfall is more likely to buy short‑term breathing space (i.e., paying off legacy debts), rather than strengthen the underlying business model, masking structural insolvency risk.

What club boards need to address 

Boards need to strengthen their financial discipline, including maintaining adequate cash reserves and stress-testing their balance sheet against severe scenarios (e.g., owner financial distress, funding withdrawal, or sharp income disruption). Clubs must be able to withstand unexpected sharp reductions in monthly gate receipts or broadcast revenues, and separate operating expenditure – particularly player wages – from debt-funded investment. Where ownership changes are underway, interim working capital arrangements are critical to prevent value erosion before completion.

Governance must probe the sources, durability, and conditions of the capital of club owners and their backers. The case studies discussed above show the vital role of forensic due diligence in club takeovers, including tracing the source of funds. Moreover, regulators are expected to introduce higher transparency requirements, capital adequacy tests, and cash-flow governance, and stricter fit-and-proper criteria for owners. Clubs will have to demonstrate that revenues are self-sustainable and recurring, reducing reliance on a single wealthy owner. Without this kind of shift, the next sports club solvency crisis will merely be postponed rather than averted. 

BTG Advisory has a specialist team that provides pre-insolvency planning services to UK sports clubs. We help club owners and management translate what relegation, a points deduction, a significant financial fine or a transfer ban means financially. If your club would benefit from independent financial scenario planning, do not hesitate to get in touch with one of our team today.