By Daniel Hunter
The number of sports clubs and facilities entering formal insolvency procedures has fallen 33% in the year since the 2012 Olympic summer, from 123 in 2011-12 to 82 in 2012-13, according to research by R3, the insolvency trade body.
The drop in the number of failing sporting companies coincides with a remarkable year of sporting success for British athletes and teams that included London hosting the Olympics from 27 July 2012.
By comparison, the total number of UK corporate insolvencies fell just 12% over a similar period.
"Regular British sporting success, as well as the feel-good glow of the Olympics, may well have encouraged both children and adults to try new sports, join local teams, or keep on going with their gym membership. Extra interest — and income — will always be a welcome boost for sports clubs and facilities throughout the country," R3 president Liz Bingham said.
"The 'legacy' of London 2012 has attracted a lot of attention. It would certainly be a positive Olympic legacy if any burst of grassroots interest in sport were to be sustained and translated into financially healthier sports clubs and facilities."
The research, compiled by R3 using Bureau van Dijk's 'Fame' database of company information, also shows that sports-related insolvencies are now 42% lower than they were five years ago when the UK entered recession.
R3 adds that despite the fall in sporting corporate failures, many sports clubs and facilities are still financially hard-pushed.
"Since the recession, many people will have cut back on discretionary spending like club memberships or trips to the gym. Sports facilities, gyms, and clubs are also vulnerable to seasonal changes in weather or lengthy gaps between playing seasons, which can make cash flow tricky to manage. Expensive space requirements, high insurance costs, and finance requirements for new equipment quickly add up too," Liz Bingham explained.
"On top of this, early periods of economic recovery, as we are experiencing now, can be dangerous for businesses on the edge. Corporate insolvencies have historically increased in this situation. Businesses that cut back on investment to survive the recession may find they are unable to cope with the stresses of expansion and increased demand that economic recovery brings.
"In this context, any boost that clubs have received from the Olympics is particularly welcome."
Corporate failures uncovered by the research include those of multiple Football League and Premier League clubs, local football clubs, golf clubs, snooker halls, local stables, motor-racing clubs, tennis clubs, and gyms.
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