Nottingham Forest had just five hours’ worth of cash reserves, says study

The government has been urged to hand the incoming independent football regulator powers to monitor clubs’ finances in real time after a new study revealed some teams, including top-flight Nottingham Forest, have just hours’ worth of cash reserves.

Forest sailed closest to the wind, with a wage bill of £58.6m but only £25,000 cash – enough to cover just five hours – according to campaign group Fair Game, which analysed the most recent accounts of the 92 professional clubs in the English football pyramid.

It comes as the House of Lords today debates the King’s Speech, which confirmed plans to establish a football regulator whose primary task will be to prevent any more clubs following Bury in going out of business.

“It is now abundantly clear that football in England urgently needs a culture change and the regulator must be given full and comprehensive powers to deliver it,” said Fair Game CEO Niall Couper.

“The current reliance on punishment has clearly failed. Overspending and financial recklessness remains commonplace.”

While Forest have since been promoted to the Premier League, the issue was present lower down the pyramid too, according to Fair Game.

Fourth-tier Walsall had just eight hours’ worth of cash reserves, while second-tier Middlesbrough and Coventry had just over two days’.

Fair Game’s chief financial officer Mark Middling added: “To properly protect the nation’s clubs, the regulator must have access to real-time figures.”

Some football regulators in Europe have already incorporated real-time monitoring of football clubs’ finances to ensure they stay solvent.

LaLiga, which runs Spain’s top two divisions, sets strict budgets based on teams’ revenue forecasts, banning those who overspend from registering new signings.

Uefa, the European governing body, now requires clubs who play in the Champions League and other club competitions to submit quarterly financial information.

“This research highlights the perilous state the football pyramid finds itself in several years after the initial effects of the Covid-19 pandemic,” said Adam Davis, the Fair Game financial analyst behind the study.

“Whilst it is unlikely all forms of revenue would be shut off to a club at any one time it demonstrates the potential overreliance on owner funding many clubs face for day-to-day running.”

At the other end of the spectrum, top-flight sides Tottenham Hotspur and West Ham United were among the clubs with the most secure cash levels.

Of the 66 teams which included cash reserves in their accounts for 2021-22, Plymouth Argyle had 413 days’ worth, followed by Spurs (395), Exeter (303), West Ham United and AFC Wimbledon (222).

The Football Governance Bill is set to establish a regulator but it is not clear yet how far-reaching its powers will be. It is not expected to issue sporting sanctions such as points deductions or relegation, leading to concerns that it will lack teeth.

Nottingham Forest declined to comment.