Source :- PERTH NOW NEWS
The chair of the Independent Football Regulator says the English game must “act before it is too late” to tackle the financial dangers facing it.
The IFR published its draft ‘State of the Game’ report on Tuesday which found that while English football generated £9billion ($A17 billion) in revenue last season, 94 per cent of clubs in the top five divisions were loss-making.
Thirty-two clubs could not survive more than 30 days without owner funding, the report found, while 17 would be loss-making even if their players played for free.
The wealth of the game was highlighted by Chelsea spending a UK record £117 ($A222) on Morgan Rogers but while no Premier League club has gone bust since Portsmouth in 2010 many are vulnerable, especially outside the top flight.
IFR chair David Kogan said in the report’s foreword that English club football was simultaneously the “richest, best and most deeply competitive in the world while also standing on the edge of financial disaster”.
The report forecasts total debt in English football would rise above £5bn ($A9.5 bn) by the end of this season, and that net transfer debt was approximately £3.4bn ($A6.4 bn), at a time when broadcast revenues are predicted to plateau or decline in the next cycle.
Kogan told the Press Association: “Everyone needs to take into account the fact that nothing is ever forever.
“We have to look at (the potential for broadcast revenues to fall) as a risk factor, and just make a judgement call, and actually also see what happens if the money does reduce.
“At the moment, the sun is shining. This is the very moment to address the issues of liquidity and losses and debt, before suddenly you see the money going backwards and it’s too late.”
The report also found nearly two-thirds of EFL and National League clubs were technically insolvent, with liabilities exceeding the book value of their assets.
Twenty clubs, primarily in the Championship, League One and National League, spent more than 80 per cent of revenue on player wages. Six spent more than 100 per cent of revenue on player wages.
Kogan added: “A significant number of clubs have told us they would not survive if their owners walked away. This lack of resilience can no longer be ignored.”
