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Insolvency expert calls extra time on recession

A leading North East insolvency expert has warned that the economy is not ready for recovery yet – and that it’s not just the business world which will continue to suffer.

Gerald Krasner, insolvency practitioner at Begbies Traynor in Newcastle and former administrator at Leeds United and Bournemouth football clubs, told bdaily that he expects the effects of the recession to hit the UK’s football clubs hard over the next twelve months.

Mr Krasner pointed to the current problems facing Portsmouth, Cardiff, Southend, and others as evidence that even the nation’s most popular sport was not safe from the economic downturn, and predicted that even more clubs would face financial trouble in 2010.

Mr Krasner said: “I expected ten clubs to disappear in ten years, and I expected six more administrations, and we’re going to see six now, comfortably.

“It’s important that if you’ve got a team, that they get paid their wages, and that there’s a smooth passage through the season. The headlines need to be for the right reason, not the wrong reason.

“The important thing for North East teams is for finances to be in order. It’s hard for teams to play well if they’re not getting paid, or if they think that next week there may not be any football club left.”

Mr Krasner said that his interest was in the realism of football clubs’ business plans – “I let the managers worry about the performance on the pitch.”

With calls at the weekend for the possibility of a government regulatory body to oversee football clubs which get into financial difficulty, Mr Krasner stressed the difficulty of getting those involved with the sport to back the process.

“It’s like getting turkeys to vote for Christmas,” he said. “The whole system needs looking at, from everyone’s point of view, not just the government. The players, the fans, the agents, the managers, everyone should have a say, publicly, with transparency.”

When asked his opinion on the North East’s prospects over the next twelve months, he said: “There are very good businesses in the North East which will do well, but companies at the smaller end of the market will suffer. I think I’m going to busy for many years. When you come out of recession, there’s litigation to follow – there’s scandal somewhere, there’s fraud, and that will continue for many years.

“Both in business and in football, we’re going to see many more insolvencies.”

This was posted in Bdaily's Members' News section by Ruth Mitchell .