Club Officials call for financial restrain!
Mon 15th Feb 2010 | Money & Finance
Both Dave Whelan the Wigan Chairman and Steve Gibson, the Middlesbrough Chairman, have both expressed their concerns over club spending.
Whelan has urged the Premier League to implement tighter financial regulations in the light of Portsmouth’s desperate battle to avoid going into administration. It’s reported that in a letter to Richard Scudamore the Premier League Chief Executive, Whelan proposed that clubs should not be allowed to borrow sums that represent more than 25 per cent of their annual turnover. Portsmouth’s debts are estimated at £60 million, only £10 million less than their last recorded turnover, while Manchester United revealed last month that they are £716.5 million in debt — more than 2½ times their turnover of £278.5 million, which is by far the biggest in the Premier League.
Voicing his concerns, Middlesbrough Chairman, Steve Gibson has warned that football “has got to learn to say no” in the face of the financial turmoil that is taking an increasing number of established clubs to the brink of crisis.
Gibson, who rescued the club from liquidation in 1986 — had taken important steps to protect their future. “For us, things had to change. We got to a European final in 2006 and still lost £12 million that year. We studied it and said, ‘Football can’t continue like this.’ Agents’ fees, wages, transfers were all inflating at an incredible rate, debts were going up and there was always going to come a day of accountability. We weren’t immune to all that.
“Although we never thought we’d get relegated, every single season we had to plan for relegation and when we were relegated that gave us the best chance of securing financial stability and a long-term future. We weren’t tempted to go for promotion at any cost, because the economic consequences of then not going up are quite horrendous.”
With a number of clubs facing court action over unpaid debt, many of which have been brought against by HMRC, the Premier League and Football League are voicing their concerns. Crystal Palace are the latest club to fall into administration and Portsmouth have been given until the end of this week to prepare a statement of affairs to prove to the court it can pay its creditors.
The Premier League’s 20 member clubs agreed to a new set of financial regulations last September to introduce greater transparency. These include a duty for each club to submit their accounts to the league’s independent auditor by March 1 each year and to submit budgets for the year ahead, which are designed to function as an “early-warning system” in case clubs are in financial trouble, but so far there are no formal restrictions on spending or borrowing.
The plans will be welcomed by UEFA boss Michel Platini, who has been calling for more regulation and stricter controls over club spending in Europe with his plans for ‘financial fair play’.
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