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Scaremongering? Or is Barber our Moses?
http://www.theguardian.com/football/2013/aug/12/football-finance-championship-league-one
Almost a third of clubs in the Championship and League One will be put up for sale this season, according to a new study, as they become increasingly squeezed and reliant on benefactors to continue pumping in funds to keep them afloat.
According to an annual survey of club finance directors by the accountancy group BDO, 65% of clubs acknowledged a dependence on their principal shareholder to finance operating losses, up from 58% last year. In the Championship the figure is 94%.
According to the research, 28% of Championship club owners and 36% of League One club owners are considering a full or partial exit over the next 12 to 18 months.
Trevor Birch, a partner in BDO's professional sports group who is currently joint administrator at Hearts, said that the huge leap in parachute payments to clubs relegated from the top flight would intensify the pressures and create a "Premier League Two by stealth". The effect could be exacerbated by the financial controls in place in the Football League, handing a natural advantage to those in receipt of parachute payments.
Birch, who delivered Portsmouth into fan ownership, said that many of the owners incurring the heaviest losses in the Championship were trying to sell but that the pool of potential buyers was diminishing. Local businessmen were becoming less interested due to pressure from fans that was heightened by social media, he added.
"There's an increasing polarisation – the Premier League is almost a different game. In League One and League Two there is no hope for them except supporters trying to protect their club from oblivion and saying they'll settle for no fireworks and some financial stability," said Birch, a former chief executive at Chelsea, Leeds United and Everton.
The figures bear that out, with 83% of Premier League finance directors describing their position as "very healthy" compared with 14% in League One. "Intense competition for a limited number of promotion places has pushed the majority of Championship and League One clubs into the red and created a dependency on principal shareholders bankrolling trading shortfalls," said Birch, who emphasised the strength and popularity of the Premier League but said it created issues lower down the pyramid.
"In this context we now see around a third of existing shareholders seeking a full or partial exit. While a similar number of clubs are being approached by external new investors, in reality there is a dwindling number of genuine potential owners outside the Premier League."
The survey also suggests that the various iterations of Financial Fair Play introduced at Uefa, Premier League and Football League level are beginning to have an effect on projected spending. Only 17% of clubs are expecting to spend more on wages, with 56% expecting to spend less, and only 12% of clubs plan to increase their transfer budget this season. In the Premier League the percentage of clubs with relegation clauses in their player contracts has increased from 56% to 75% in the space of a year.
http://www.theguardian.com/football/2013/aug/12/football-finance-championship-league-one
Almost a third of clubs in the Championship and League One will be put up for sale this season, according to a new study, as they become increasingly squeezed and reliant on benefactors to continue pumping in funds to keep them afloat.
According to an annual survey of club finance directors by the accountancy group BDO, 65% of clubs acknowledged a dependence on their principal shareholder to finance operating losses, up from 58% last year. In the Championship the figure is 94%.
According to the research, 28% of Championship club owners and 36% of League One club owners are considering a full or partial exit over the next 12 to 18 months.
Trevor Birch, a partner in BDO's professional sports group who is currently joint administrator at Hearts, said that the huge leap in parachute payments to clubs relegated from the top flight would intensify the pressures and create a "Premier League Two by stealth". The effect could be exacerbated by the financial controls in place in the Football League, handing a natural advantage to those in receipt of parachute payments.
Birch, who delivered Portsmouth into fan ownership, said that many of the owners incurring the heaviest losses in the Championship were trying to sell but that the pool of potential buyers was diminishing. Local businessmen were becoming less interested due to pressure from fans that was heightened by social media, he added.
"There's an increasing polarisation – the Premier League is almost a different game. In League One and League Two there is no hope for them except supporters trying to protect their club from oblivion and saying they'll settle for no fireworks and some financial stability," said Birch, a former chief executive at Chelsea, Leeds United and Everton.
The figures bear that out, with 83% of Premier League finance directors describing their position as "very healthy" compared with 14% in League One. "Intense competition for a limited number of promotion places has pushed the majority of Championship and League One clubs into the red and created a dependency on principal shareholders bankrolling trading shortfalls," said Birch, who emphasised the strength and popularity of the Premier League but said it created issues lower down the pyramid.
"In this context we now see around a third of existing shareholders seeking a full or partial exit. While a similar number of clubs are being approached by external new investors, in reality there is a dwindling number of genuine potential owners outside the Premier League."
The survey also suggests that the various iterations of Financial Fair Play introduced at Uefa, Premier League and Football League level are beginning to have an effect on projected spending. Only 17% of clubs are expecting to spend more on wages, with 56% expecting to spend less, and only 12% of clubs plan to increase their transfer budget this season. In the Premier League the percentage of clubs with relegation clauses in their player contracts has increased from 56% to 75% in the space of a year.