Recently XPro, a charity for ex players, suggested that two in five ex footballers consider Bankruptcy or declare themselves Bankrupt within five years of retirement.  Whilst this statement appears to be without citation and consequently unsubstantiated it certainly made headlines in the media and provoked much discussion.

In any profession this is an incredibly high level of insolvency but it appears all the more surprising to the average football fan when they equate these figures to their perception of premier league players earning an average of £30,000.00 per week. 

Perhaps the headline grabbing figure in the first paragraph needs to be put into context.

The first point to make is that premier league players earning tens of thousands of pounds per week only account for a proportion of the footballers playing professionally in the country.  Below the premier league are a further three divisions.  In addition, most players in the top non-league division, the Blue Square Premier, are professional.

Certainly in the lower leagues there has been a financial realignment in more recent years and clubs have realised that they cannot simply spend money they don’t have.  This has led the clubs to a more realistic wage setting structure and is further supported by the stick of a points deduction from the Football League should a club become insolvent and go into administration.

All of this means that clubs need to be more aware of their headline costs – particularly wages – which, as in most businesses, is the major cost for consideration.

Most players in the lower divisions of the football league structure in England are on a living wage of £1,000.00 or less per week.  That is not to say that I believe players in the lower divisions are more likely to face bankruptcy than their premiership counterparts.  I think the risk of bankruptcy is probably spread evenly amongst all footballers whichever division they ply their trade.

It is less surprising to find that some footballers may consider Bankruptcy given that their livelihoods stop when they reach 35.  If they have not trained in other areas they may struggle to find employment; with insolvency as a consequence.

A further point to make which spans the spectrum from premier league to lower leagues is that of bad advice with regards to money and investments during their playing career and afterwards.

I work as a personal insolvency solicitor for Farleys Solicitors in Manchester and specialise in debt advice.  I work closely with the Professional Footballers Association (PFA) which is the footballers union. What has been clear to me is the level of poor investments decisions made by footballers via their ‘advisors’. 

For example, many footballers have fallen foul of the various film schemes that were set up to enable them to pay less tax.  Due to the failure of these arrangements, I have had to advise many footballers and ex-footballers that they are insolvent and that a Bankruptcy Petition would be in their best interests.

Although as a solicitor I am unable to give financial advice, it seems there is a proliferation of risky investments with footballers putting nearly all of their money into these investments rather than spreading the risk. 

Another area that I have noticed a common thread is business ventures.  Again, typically on the say so of ‘advisors’, many footballers have invested in companies without having the necessary skills and understanding to run that business and make it a success.

Many footballers have become directors of their own companies ranging from shops and food outlets to travel agencies and beyond. Personal money is often ploughed into these businesses to keep them afloat and if they have not managed to make the business a success and the company fails, that personal money fails with it.  Again, the result is often insolvency. Such investments are even more risky after players have retired as they do not have the salary to personally subsidise a failing company, resulting in them becoming personally insolvent as well as the company needed to be wound up.

There are further reasons why footballers become insolvent and I would classify these as cultural in nature.  Gambling is one such issue that appears to be prevalent amongst footballers, as in society in general. There are also other addictive concerns such as drinking and drugs – all of which can have disastrous financial implications that will often lead to insolvency.

Debt cannot be treated in isolation. Debt problems cause stress and anxiety to the debtor to different degrees which is dependent on the debtor’s personality and the level of debt involved. I work with the Lancashire and Greater Manchester Police Federations as well as the PFA and it is to their credit that they allow their members the chance to get confidential advice from a specialist debt advisor. It is a welfare issue for the Union. The effect of debt can be suffocating. Often the debtor feels isolated and unable to talk to anyone about the problem. This exacerbates the stress felt. It is important the Union offers the member an ‘escape valve’ and hopefully that is the service we provide. More than once I have seen a tough centre half close to tears when they realise there is a way out of their difficulties.

What can be done to help footballers becoming insolvent?  Certainly I am aware that my role at the minute is the role of a ‘fire fighter’ as I deal with problems after they have already arisen. I often advise insolvent footballers and Bankruptcy or Individual Voluntary Arrangements (IVAs) are not uncommon.  What would be better for the profession as a whole and more satisfying would be to prevent footballers becoming insolvent in the first place.

Looking to develop things I am currently speaking with the PFA about the possibility of bringing in a Financial and Debt Awareness education programme to the apprentices in the industry.  I also run Debt Awareness Workshops for PFA officers when required.

For their part, the PFA do a great deal to help their members on many different levels.

Training programmes during a professionals playing career are made available and encouraged by the PFA to allow them to enter into the employment world once they are retired.

The PFA also take a proactive role around education while players are still plying their trade or if not after retirement. The PFA will fund and advise on educational courses that will help to equip their members to get employment after they have hung up their boots. I know this to be true on a personal level. My brother, under the guidance and financial support of the PFA, studied for a sports science degree while he was playing professional football. He managed to get a good job after he had finished playing but that opportunity would not have been available to him had he not completed the degree.

The PFA have a trained counsellor to help with gambling and other addictive problems such as drinking and drugs and the associated problems these addictions cause such as depression and anxiety.

There is also a Benevolent Fund available to members if needed.  They also fund any necessary debt advice from me as a personal insolvency lawyer.  From there, I am then able to advise and explain the best option for a member with money difficulties; be that Bankruptcy, debt management, debt settlement or dealing with a creditor court action, there are a myriad of variables.

In summary I think there are maybe two areas that I would like to develop in partnership with the PFA. Firstly, prevention is better than cure.  Let’s endeavour to reduce the headline insolvency figures by way of better education around debt and insolvency. Secondly, if and when a player becomes insolvent, they should be offered good debt advice so the player can deal with his debts as best as possible.

By Mark Skinner, Bankruptcy Solicitor, Manchester