Gloomy outlook for football finance
Just one quarter of football clubs are expecting to make a profit in 2003/04, a survey has found.
According to the survey, from business advisors Pannell Kerr Forster (PKF), 24% of Premiership, English First Division and Scottish Premier League (SPL) clubs expect to make money this season.
The report also suggests the wealth gap between the elite English Premiership and the rest of the league is now irreversible, with those outside the Premier League facing extinction if they do not change their business models.
"Never before has the polarisation within football been so apparent, with the elite of the game clearly running away with the spoils," said PKF partner Stuart Barnsdall.
PKF's Financing Football 2003 report tracked the views of 21 finance directors - 15 from the Premiership and Division One, and six from the SPL.
The group found 43% of clubs had increased their borrowing over the past year, while 57% expect to use up most of their banking facility this year.
Ground-shares mooted
But in a sign that clubs are facing up to the looming cash crisis, the report found that 40% of Premiership and Nationwide clubs, and 33% of SPL clubs, would be willing to consider ground-sharing to cut costs.
The figure is up sharply from last year, when just 14% of Premiership clubs said they would be willing to share facilities with another club.
In the English league, Fulham is sharing Queen's Park Rangers' Loftus Road ground in west London, although that is only a temporary arrangement while Fulham's Craven Cottage ground is being refurbished.
The SPL's Motherwell - which went into administration 15 months ago - is one club which may negotiate a similar arrangement.
Brian Jackson, Motherwell's administrator, told BBC Radio Five Live the club "probably should be" looking at ground sharing, adding: "I think you need to look at every way of cutting costs."
Sentimental ties
However, he added it would be difficult to follow the example of Inter Milan and AC Milan who share the San Siro stadium in Italy - even though such a move could net it £300,000 a year.
"I think there's an emotional attachment that fans and directors of clubs have belonging to a club and therefore to a certain ground," he said.
"But there is the reality that you must cut costs. You have to cut costs everywhere you can."
Meanwhile, according to PKF's Stuart Barnsdall, the next two years will be "crucial" for smaller clubs.
In another effort to save money 71% of clubs are now linking player pay to performance, the survey found, with 55% of SPL and First Division clubs cutting wages in the event of relegation.
Adapt or die
Elsewhere, more clubs are worried about the collapse in the value of their players.
The findings echo that of a football finance study by consultants Deloitte & Touche last week.
That report found that while the ratio of player wages to income remains high, the balance of power in pay negotiations is swinging back to the clubs.
Looking ahead, PKF's report also confirms that Premiership clubs are concerned income may fall when their exclusive broadcast deal with satellite TV station BSkyB expires.
Stuart Barnsdall said: "With the market for football now proven to be finite and largely restricted to the most powerful, those who do manage to survive face the prospect of reinventing their business models based on no-TV related income targeted at a local market.
"Clubs who fail to respond to the changing environment are unlikely to exist in the long term."
Oh dear, a gloomy future then.
I definitely think Dick's being sensible with the club's finances
Just one quarter of football clubs are expecting to make a profit in 2003/04, a survey has found.
According to the survey, from business advisors Pannell Kerr Forster (PKF), 24% of Premiership, English First Division and Scottish Premier League (SPL) clubs expect to make money this season.
The report also suggests the wealth gap between the elite English Premiership and the rest of the league is now irreversible, with those outside the Premier League facing extinction if they do not change their business models.
"Never before has the polarisation within football been so apparent, with the elite of the game clearly running away with the spoils," said PKF partner Stuart Barnsdall.
PKF's Financing Football 2003 report tracked the views of 21 finance directors - 15 from the Premiership and Division One, and six from the SPL.
The group found 43% of clubs had increased their borrowing over the past year, while 57% expect to use up most of their banking facility this year.
Ground-shares mooted
But in a sign that clubs are facing up to the looming cash crisis, the report found that 40% of Premiership and Nationwide clubs, and 33% of SPL clubs, would be willing to consider ground-sharing to cut costs.
The figure is up sharply from last year, when just 14% of Premiership clubs said they would be willing to share facilities with another club.
In the English league, Fulham is sharing Queen's Park Rangers' Loftus Road ground in west London, although that is only a temporary arrangement while Fulham's Craven Cottage ground is being refurbished.
The SPL's Motherwell - which went into administration 15 months ago - is one club which may negotiate a similar arrangement.
Brian Jackson, Motherwell's administrator, told BBC Radio Five Live the club "probably should be" looking at ground sharing, adding: "I think you need to look at every way of cutting costs."
Sentimental ties
However, he added it would be difficult to follow the example of Inter Milan and AC Milan who share the San Siro stadium in Italy - even though such a move could net it £300,000 a year.
"I think there's an emotional attachment that fans and directors of clubs have belonging to a club and therefore to a certain ground," he said.
"But there is the reality that you must cut costs. You have to cut costs everywhere you can."
Meanwhile, according to PKF's Stuart Barnsdall, the next two years will be "crucial" for smaller clubs.
In another effort to save money 71% of clubs are now linking player pay to performance, the survey found, with 55% of SPL and First Division clubs cutting wages in the event of relegation.
Adapt or die
Elsewhere, more clubs are worried about the collapse in the value of their players.
The findings echo that of a football finance study by consultants Deloitte & Touche last week.
That report found that while the ratio of player wages to income remains high, the balance of power in pay negotiations is swinging back to the clubs.
Looking ahead, PKF's report also confirms that Premiership clubs are concerned income may fall when their exclusive broadcast deal with satellite TV station BSkyB expires.
Stuart Barnsdall said: "With the market for football now proven to be finite and largely restricted to the most powerful, those who do manage to survive face the prospect of reinventing their business models based on no-TV related income targeted at a local market.
"Clubs who fail to respond to the changing environment are unlikely to exist in the long term."
Oh dear, a gloomy future then.
I definitely think Dick's being sensible with the club's finances
all doom and gloom