ICSM Business – Sports Industry Insolvency News: Torquay United FC enter administration after making a £1.1 million pound loss

By Harry Mottram: The Devon Riviera club once beat Leeds, Southampton and  held their own against Crystal Palace away when they were a Football League outfit back in the day. But since those glory days and dropping out of the league into the National League and now National League South Torquay in 2003 the club have struggled to remain competitive and solvent.

The current owner Clarke Osborne said he could no longer afford to support the club financially and had placed the club into administration with Begbies Traynor. The club made this statement on April 5, 2024: “Scott Kippax, Neil Vinnicombe and Simon Haskew of Begbies Traynor have been appointed as joint administrators of Torquay United AFC Limited.  They are legally advised by Robin Koolhoven of Stephens Scown LLP. During this interim period, TUAFC is under the control of the administrators and directors George Edwards and Mel Hayman have accepted the administrators’ request to continue working for the Club on a voluntary basis, in order to help ensure Torquay United AFC continues to function as a professional football club, and to help facilitate the smooth transition of TUAFC to a new owner.”

In 2023 the club made a loss of £1.1 million pounds which has crippled the finances of the club in sixth level of the pyramid football structure with their players and staff all paid making it one of the few clubs at this level to fully professional. The team were deducted ten points by the league for announcing they intended to enter administration last month meaning they dropped down the league and are now in the bottom half of the structure.

They follow Taunton Town FC who are also in the same position – and of course are not alone in having financial problems in football. In the last five years football league clubs Wigan athletic, Bury, Macclesfield Town, Derby County, Doncaster, Sheffield United and Scunthorpe United have all entered the insolvency process.

The club will continue to play in the league and all staff and players will be retained until a new owner is found. One posibility is the club follows in the footsteps of Bath City FC and Exeter City FC and become a community club owned by the fans. ICSM understands that an offer along those lines is possible.

Ian Carrotte of ICSM said: “We have seen this problem in top flight rugby where the likes of Worcester, Wasps and London Irish have gone into administration owing millions of pounds. The worst thing being that many suppliers assume a club is a safe business to trade with -and many are supporters making it particularly tough when the club goes bust. My advice is always to treat a sports club as you would any other business and don’t allow extended credit terms as I’m afraid some suppliers may not get paid by Torquay United if the worst happens.”

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