English football ‘dangerously exposed’ to financial risk, regulator finds
Oct 13 : English soccer clubs are “dangerously exposed” to financial risk, the country’s Independent Football Regulator said in a report released on Tuesday, after finding that 94 per cent of clubs in the top five divisions were operating at a loss.
The IFR, established last year, proposed stronger cost controls and contingency planning as part of a six-point plan to improve the financial sustainability of the English game.
Its draft State of the Game report, which will undergo an eight-week public consultation before a final version is published, found nearly two-thirds of English Football League and National League clubs were “technically insolvent” and increasingly dependent on cash injections from owners.
“While some of our clubs are among the richest and most competitive in the world, others are standing on the edge of financial disaster… A significant number of clubs have told us they would not survive if their owners walked away,” said IFR Chair David Kogan.
The regulator said clubs should manage financial risks more effectively and have contingency plans in place should owners withdraw their support.
Britain’s culture secretary, Lisa Nandy, said the findings painted a stark picture of club finances.
“Football fans for years have lived with the anxiety of knowing their club could be one bad owner or poor month away from ruin,” she said in a statement.
“This report doesn’t just validate that anxiety, it has blown the doors off the game with the most stark uncovering of the state of football club finances in England today.”
PREMIER LEAGUE BACKS REPORT
The Premier League said it agreed with the report’s preference for a “football-led solution to revenue distribution.”
“As the report makes clear, new funding must go hand in hand with effective financial controls and wider reforms to strengthen clubs,” the league said in a statement.
The Premier League is negotiating a new revenue-sharing deal with the English Football League. Media reports said that Premier League clubs have offered to provide £1.8 billion ($2.38 billion) over 10 years, in addition to existing funding, but the EFL has asked for £1 billion over five years.
“We believe the proposal we have made to the EFL, which was unanimously approved by Premier League clubs in July, meets the objectives the IFR has set out in its report,” the Premier League added.
NO POLITICAL PRESSURE OVER MAN CITY CASE, KOGAN SAYS
Kogan said he had faced no political pressure since Manchester City were found guilty of serious breaches of the Premier League’s financial rules by an independent commission.
City have appealed the decision and continue to maintain their innocence, saying the commission’s opinion contains “clear material errors”.
The IFR has the power to assess the suitability of club owners over financial wrongdoing, raising the possibility of scrutiny of City’s ownership if the club loses its appeal against the ruling.
“I (have) made it very clear … any form of political interference on the way we operate is going to result in my resigning from this role,” Kogan told reporters at Manchester’s National Football Museum.
“Just to be crystal clear, we’ve come under absolutely no political pressure whatsoever on this or any other topic.”
($1 = 0.7551 pounds)
