finance

Scottish Football Finance Index 2020: State of play off the field


While it has been very much overshadowed by the coronavirus outbreak and the suspension of the Scottish football season, Insider’s regular analysis of the business side of Scottish football gives us a snapshot of where the top clubs were before the hammer fell.

The Insider Scottish Football Finance Index examines and analyses three areas of business performance: financial discipline, corporate governance and stakeholder engagement, which are then weighted to give an overall financial score.

As last year, the Insider Scottish Football Finance Index 2020 features the top 20 clubs in the Scottish leagues. The rankings this time are very much in line with the divisional structure, with almost all of the top clubs from the 2018-19 season in the top places.

The only marked exception to that is the position of Livingston FC, whose 16th position in the index contrasts markedly with that of its position in the Scottish Premiership when the season was halted – it was standing at number five in the league.

The consistency of the club’s on pitch performances had lifted them to a higher place in the league points table than many observers might have predicted.

The gap between Celtic FC and the rest of the pack has closed over the year, after the club had a less successful financial performance than previously. The Glasgow club had a negative cash flow, which hit their ranking under the financial discipline heading.

One of the biggest changes in the rankings is that of Falkirk, which dropped to bottom spot from the 10th position it had been in last year. The main reason for the fall was because of the club’s corporate governance after a year in which the club itself conducted “a full root and branch review of the board, management and governance of the club”.

A notable riser is Hearth of Midlothian, which rose to fourth place in the index, with the Tynecastle club improving its financial position and its moves further down the road to fan ownership.

Aberdeen FC, however, has slipped back with the boardroom changes at the club seeing majority shareholder Dave Cormack doing the two jobs of chairman and managing director after the Pittodrie club ousted Duncan Fraser from his then chief executive role.

Partick Thistle FC has slipped back to 13th place – down from ninth last year – after a strange few months that saw a boardroom coup, with three directors including the chair ousted, only to see their return earlier this calendar year.

The remarkable financial scam that hit Hamilton FC took its financial discipline ranking to the joint lowest within the Scottish Premiership. The fact they finished in the index as high as 11th place is due to their good management of player investment.

The Insider Football Finance Index is a complex decision analysis model designed to rank the top Scottish football clubs – there are 20 in the current index.

The index was originally designed in 2017 based on interviews with accountants, lawyers and financial experts and other research to produce 11 main criteria, categorised into three sub-sections of financial discipline, corporate governance and stakeholder engagement.

The index used proxy measures for the area of study to give high-quality secondary data where primary data is not available.

The research for this year’s index was carried out by Steven Wilson, Insider’s in-house researcher.

In the interests of full disclosure, it should be noted that the author of this article is a lifelong supporter of Motherwell Football Club and served for a time on the Board of the Well Society, the fan ownership group.



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