WARNINGS about the future financial viability of Scottish football were made hours before one of the nation's oldest clubs embarked on a programme of swingeing cuts in a bid for survival.
Football finance expert Ken Pattullo says one in eight of Scotland's professional clubs remain in "distress" despite warnings over the financial future after Rangers entered administration last year. He warned of "more dif- ficulties" in finances for the sport north of the Border in the coming year.
The figures, compiled by Begbies Traynor accountants, came after crisis-hit Dunfermline announced eight of the first team squad would be made redundant two days after it entered interim administration. The 128-year-old club is also releasing three of its 17-strong under-20 squad as talks continue to keep the club functioning.
Manager Jim Jefferies has offered to remain in post and work for free while the financially troubled club battles to avoid liquidation.
Mr Pattullo, a partner at Begbies Traynor, said four professional clubs in the top three divisions were facing crippling debts saying there remained "worrying levels of distress" in Scottish football, despite very public club collapses, including the financial meltdown of Rangers.
His firm's Red Flag Alert Football Distress Survey shows the same number of Scottish clubs are in trouble as when the survey was first carried out in March 2012 – a month after Craig Whyte took Rangers into administration.
While an average of just 2% of UK businesses are showing symptoms of financial distress, 12.5% of 32 Scottish football clubs surveyed show the same degree of financial ill health. But Mr Patullo said there had been a fall in distress levels over the past six months. In October 2012, there were six clubs in peril.
He said: "After a number of failures here in Scotland it was widely accepted a sea change was needed in the way clubs approached their finances.
"These survey results show that while clubs have started to address their financial management issues, the same worrying levels of distress are present as there were a year ago, but the game has coped with the disruption the Rangers administration caused last year."
According to the study, the warning signs of financial problems include serious court actions against clubs, including winding-up petitions and high court writs, clubs being issued with striking off notices for late filing of accounts, and those with serious negative balances in their accounts.
In the last year Kilmarnock and Hearts settled bills when faced with the threat of winding-up orders.
As Rangers under new ownership were placed in the fourth rung of Scottish football, average attendances in the top three divisions declined, and gates in the Scottish Premier League fell by almost 30% from 13,861 per typical match in 2011/12 to 9901 now. But overall, there were 5% more fans going to matches in the four divisions which was "great news for the future of the game in Scotland", said Mr Pattullo.
This was partly because Rangers relegation sent average attendances in Division Three "through the roof" with average gates up by more than 1000% from 475 in 2011/12 to 5457 now.
At Dunfermline, interim administrator Bryan Jackson, who had warned hopes of survival were 50/50, said that after a number of players had lost their jobs, others could follow. He also called on fans and the wider com-munity to support the club to ensure it survives to the end of the season.
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