Just under half of clubs across the EFL are struggling with 'financial distress' according to a survey as US investors look to take advantage with discounted investments.
The Football Distress Survey, conducted every year since 2012 by business recovery specialists Begbies Traynor, report that "financial distress is now affecting a total of 32 (44%) of the 72 clubs in the English Football League." That's double the number since the pandemic.
That is of course down to the lack of supporters and revenue due to the stadium closures of the pandemic but also the increase in players' wages in relation to the rising inflation.
The report adds that "the combination of financial hardship and a struggling pound has made UK clubs an attractive investment opportunity for US investors and just like Chelsea, Leeds United and lower league clubs such as Wrexham, more clubs are likely to see North American investment or outright ownership in the next year."
That could play tap into the future of Bristol City with owner Steve Lansdown still looking for outside investment and while it is understood they are one of a number of Championship clubs effectively up for sale. Whether that is a full sale or to retain a stake in the club remains to be seen.
Lansdown’s personal fortune has reportedly fallen by £128m over the last 12 months, according to the Sunday Times Rich List, although he is still worth £1.237bn through financial services company Hargreaves-Lansdown.
Begbies Traynor partner Julie Palmer said of overseas investors: "The squeeze that keeps clubs from building a war chest and cash flow resilience offers an opportunity to overseas investors, especially when Brexit has left the pound so discounted against the US dollar.
"For some clubs that’s proving to be a welcome lifeline that prevents financial failure and the legacy of points deductions."
Burnley were taken over by American ALK Capital company in 2020, while Crystal Palace saw American investor John Textor become the largest individual owner of the club last year. American John Berylson has been Millwall chairman since 2007 while Stephen Kaplan and Jason Levien own 68 per cent of Swansea City, but outside investment into the Championship has traditional come from Asia.
American Chris Kirchner has launched failed attempts at buying Preston North End and now-relegated Derby County in recent months. The most recent takeover within the league saw Turkish media mogul Acun Ilicali purchase the Tigers from Egyptian Assem Allam.
City are attempting to help balance the books after posting losses of £38.4m for the financial year ending 2021 as they continue their attempts to fall in line with the EFL's Profit & Sustainability rules that could see them punished with a points deduction.
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