Merseyside's football clubs are expected to meet financial fair play requirements, says new study
Merseyside football clubs are on track to meet ‘financial fair play’ (FFP) rules, says a report out today by business adviser and accountants BDO.
It quizzed financial directors at 66 English football clubs and found 85% of clubs expect to comply with FFP rules in 2013/14 without significant changes to their business models.
But FFP is still the third most pressing concern for Premiership and Championship clubs, with 83% planning to spend less, or the same, on payroll costs this season.
The survey also found that 83% of Premier League financial directors described their financial position as “very healthy”.
However, there is a growing reliance on benefactors to plug funding gaps at clubs. In total, 65% acknowledged a dependence on principal shareholder(s) to finance operating losses, compared with 58% last year.
The survey warns that this could lead to an increase in owner exits over the next couple of years, mainly at clubs outside the Premier League.
Julien Rye, partner and football specialist at BDO, said: “The pot of gold that the Premier League, which attracts substantial commercial income, is perceived to represent means there is intense competition for a limited number of promotion places.
“This creates a temptation for Championship and League One clubs to overspend and push themselves into the red, leading to a dependency on principal shareholders bankrolling trading shortfalls.
“In this context, and due to minimal resources, we now see around a third of existing owners seeking a full or partial exit.
“Football clubs continue to attract huge interest and publicity but, when it comes to the crunch, only a limited number of potential investors have the resources and the appetite to bankroll the cost of their club’s ambitions.”