Football League chairman Greg Clarke warns clubs of debts danger
Tue 15th Feb 2011 | Money & Finance
Football League chairman Greg Clarke has warned that clubs are heading towards "the precipice" due to too much debt.
The stark warning was made to a Parliamentary inquiry into football governance on Tuesday with Clarke saying there needed to be a sea of change in the way clubs were run.
Clarke told MPs on the culture, media and sport select committee: "Debt's the biggest problem. If I had to list the 10 things about football that keep me awake at night, it would be debt one to 10.
"The level of debt is absolutely unsustainable.
"We are heading for the precipice and we will get there quicker than people think."
The Football League have set up working parties to investigate all three of their divisions and they will publish a five-year plan aimed at improving the finances and running of their 72 clubs.
Clarke added: "We will hope to catalyse change. We will share it with our chairmen and say this where you are going unless you change now."
The Football League chairman also called for the Football Association to bring in independent directors and believes that new FA chairman David Bernstein will push hard for that change.
"I would be amazed if he doesn't drive hard for independent directors - he comes from a background where it's normal to have independent directors," said Clarke. "And he will have our support."
Clarke was also questioned by MPs over the 'football creditors' rule, where clubs that become insolvent prioritise paying off debts to other clubs and players before tackling money owed to other creditors including the taxman.
"I came in to this job thinking the football creditors' rule was an outrage," said Clarke but added that he now believes it to be the "least worst" option. He said: "The alternative could well see Football League clubs going out of business."
Clarke said he feared that plans to change the youth development system - where clubs would be forced to accept the FIFA compensation model rather than transfer tribunals to determine compensation payments for young players - would also have a bad effect on FL clubs.
"Should we be forced into the FIFA model the amounts the clubs get could decline markedly," he said,
Gordon Taylor, chief executive of the Professional Footballers' Association, told the inquiry that two thirds of the 92 league clubs had been in financial difficulties.
"The game has never had more income but on the other hand has never had more debt," he said.
Taylor called more regulation of football agents, adding: "It is going to be open house again if we are not careful. The transfer market can be a vehicle for abuse because of the vast amounts of money involved.
"There needs to be some form of control on agents."
Taylor also defended top players' wages saying: "The game is about the players, that's who people pay to watch. Nobody goes to a film and complains about Brad Pitt's wages, or goes to an Elton John or Take That concert and complains about how much they are getting paid.
"It is a very, very short career - on average just eight years."
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