Football League clubs are carrying “unsustainable” levels of debt and are heading towards a financial “precipice”, League chairman Greg Clarke warned yesterday.
By Paul Kelso 9:12PM GMT 15 Feb 2011
Giving evidence before a parliamentary select committee inquiry into football governance, Clarke warned that the underlying finances of football needed urgent reform if clubs were to be viable in future. “Debt’s the biggest problem in the game. If I had to list the 10 things about football that keep me awake at night, it would be debt one to 10,” he said.
“Football League clubs carry about one third of a billion pounds in debt but overall make no profit and have to service that with no positive cash flow. If we were a commercial organisation we would be out of business.
“Debt is a good proxy for risk and the amount of debt in the Football League is absolutely unsustainable We are heading for the precipice and we will get there quicker than people think.”
Clarke said the League had established working parties to investigate the finances of all three of its divisions and was working on a five-year plan that would spell out to clubs the consequences of inaction, as well as alternatives to improve the financial landscape.
Conservative MP Dr Therese Coffey yesterday described his evidence as “having the tone of a jilted lover”, but together, his testimony and Clarke’s painted a grim picture.
Clarke also called for the FA to recruit independent directors to mediate between the vested interests on the board, and predicted new FA chairman David Bernstein would push for that change.
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