Bristol Rovers get money back from the bank

Article written in Accountingweb on 12.10.04

Bristol Rovers Football club recently received a cash settlement from its former bank following negotiations that focused on alleged overcharges.

Bank charge auditor CBBA investigated the club's accounts and helped to negotiate the settlement,the sum of which was not disclosed. In this particular case, Bristol Rovers gave its permission for the settlement to be publicised.

According to Rovers' company secretary Toni Watola, "For a football club it is always nice to receive some money and the fact that the process to discover this amount owing didn't actually cost us anything is an added bonus.

"As far as football clubs are concerned, I'm sure we will not be alone in this and would whole-heartedly recommend that any that have had bank borrowings talk to CBBA and have the process carried out. I have no doubt that this will also apply for many other businesses and leisure organisations."

The parlous state of football finances is well known and a regular source of publicity for business turnaround specialists - both Leeds United and Tottenham Hotspur have had high profile insolvency praditioners serve on their boards in recent years.

CBBA founder Jeff Lampert said that the audit service was working with a number of football Ieague clubs, who were particularly vulnerable to overcharging.

"From our experience, anyone paying 2% over base rate is more likely to be overcharged thananyone paying under 1% over base rate," Lampert said. And because of their reliance on debt,football clubs often fall into the higher risk category.

One source of cashflow problems stems from money that is withheld when fans buy season tickets with credit cards. In effect, the ticket holder pays for entry to the 20 or so home games a club will play in a season, But because of doubts on the part of credit card companies that the clubs will see out the season, they withhold a percentage of the money to offset potential claims, This with holding will often send clubs to their banks for covering loans to help them through the season.

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