By Keith Weir
LONDON, Aug 13 (Reuters) – Clubs at lower levels in English soccer remain concerned about their finances despite record amounts of cash flowing to teams in the elite Premier League, a survey showed on Tuesday.
Faced with the need to tighten their belts, clubs are willing to comply with curbs on losses or wages that will apply across all four tiers of the English professional game this season, accountancy firm BDO said in its survey.
“The divisions below the Premier League are crying out for a sustainable business model,” said BDO’s Trevor Birch.
“The initial signs suggest that clubs are taking the new requirements seriously and beginning to adapt their behaviour in the way the football authorities intended, which is encouraging,” added Birch, who has worked as an administrator to stricken British clubs including Portsmouth and Hearts.
The 20 clubs in the Premier League have never had it so good thanks to enhanced television deals that take effect when the new season kicks off at the weekend.
However, those riches have widened the gulf between the top flight and the rest. Clubs have also been notoriously bad at managing costs, with the lion’s share of additional revenue swallowed up by player wages.
Only three out of 10 clubs view their financial situation as very healthy, BDO said after surveying finance directors from 66 clubs in England and the Scottish Premier League.
Two-thirds of the clubs surveyed were reliant on their main shareholder to cover their losses.
Birch said problems were most acute in the Championship where clubs had been spending heavily to try to win promotion to the Premier League.
Cardiff City, Hull City and Crystal Palace – the three teams promoted in May – can expect additional revenues of at least 120 million pounds ($185 million) over the next five years even if their stay in the top flight lasts only one season.
UEFA, European soccer’s ruling body, is trying to force top clubs to cut their losses or ultimately risk exclusion from its competitions. Aggressive summer transfer campaigns have fuelled doubts about how seriously some teams are taking the rules.
English soccer has followed suit, with a range of measures designed to help its 92 professional clubs to get their finances in order. The plight of former Premier League clubs like Portsmouth and Coventry City shows that action is needed.
Portsmouth are now recovering in the fourth tier after a fans-led rescue. Third tier Coventry face a battle for survival after going into administration and having to play their home games across country in the town of Northampton. ($1 = 0.6440 British pounds) (Writing by Keith Weir. Editing by Patrick Johnston)