Richard Sutcliffe: Introduction of UEFA’s financial rules can’t come soon enough

THERE is a chill wind blowing through football right now and it has nothing to do with the weather.

Football club finances have been back in the headlines in recent weeks and they have not made for comfortable reading.

Nottingham Forest, for instance, recently announced losses of £11.4m for the year to May 31, 2011. Coming on the back of a £12.3m deficit in the previous 12 months, this represents an eye-watering loss for a club who reached the Championship play-offs just six months ago.

Hide Ad
Hide Ad

In isolation, such an abysmal financial performance could be dismissed as ‘just one of those things’ and something that is only of genuine concern to Forest fans.

The problem, however, is that such poor figures are far from the exception to the rule with Bristol City also having made a similar loss last season. What perhaps makes the Robins’ figures even worse is that the £11.4m loss for 2010-11 is only slightly less than their entire turnover – begging the question how on earth has the club allowed itself to over-spend so drastically?

Further down the leagues, the picture is hardly much healthier with Sheffield United having last month posted a £13.6m loss, while Preston North End owner Trevor Hemmings recently revealed he is having to plough £750,000 per month in to keep the club going.

It is a sorry tale and one that means the implementation of UEFA’s financial fair play to the Football League cannot come a moment too soon.

Hide Ad
Hide Ad

Under the plan, which was accepted in principle by the 72 member clubs at their annual meeting last June, Championship clubs will be allowed to only spend what they earn from the 2012-13 season onwards while sides in League One and Two will not be permitted to spend more than 55 per cent of their turnover on player wages.

Increasing levels of debt and the fall in television income caused by the BBC choosing not to extend their three-year deal with the League beyond the end of this season prompted the clubs to adopt UEFA’s scheme – the self-policing system of the past having clearly not worked, as proved by the number of clubs who have slipped into administration over the past couple of decades.

The underlying problem, of course, is player wages and the crazy amounts that clubs are prepared to pay.

In 2009-10, for example, Bristol City paid out £13.8m in wages but earned just £11m – a ratio that means the club paid out 124 per cent of their income on salaries, a crazy state of affairs and an indication as to why they are in such a financial mess.

Hide Ad
Hide Ad

Likewise, Forest, the other Championship club to post eye-watering losses in recent weeks, paid out £16m in wages and brought in income of £15m during the same season – a ratio of 106 per cent.

Predictably, Preston, then in the second tier, were another to spend more on wages than they generated in income during 2009-10, as were Portsmouth, Ipswich Town and QPR. It is a ridiculous state of affairs and underlines why change in the way clubs are run is so necessary.

The new system coming the Football League’s way may not prove to be perfect, few if any are.

But adopting UEFA’s financial fair play rules surely represents a step in the right direction. And who knows, maybe even one day we will get a return to a time when the mantra ‘if we haven’t got it, we can’t spend it’ was one that owners and chairmen were willing to adhere to?