Is doomsday approaching for football in England?

The credit crunch has hit football hard but the chairman of the Football League has said that the worst for English clubs is yet to come.

Recession

Lord Mawhinney says that clubs have so far been shielded from the economic climate because their business strategies for this season were all put in place before the recession hit. He told the BBC:

“Season tickets, corporate hospitality and commercial sponsorships were all negotiated a year ago. They’re about to start doing that for next season and there will be a reality check for some clubs.”

Just last October, the Football Association chairman Lord Triesman said that English clubs owed an estimated £3bn. He said that clubs could be in “terrible danger” should the economic crisis deepen. There is little doubt that the crisis has indeed deepened.

Debt

Unbelievably, Triesman revealed that the Premier League’s big four, Manchester United, Liverpool, Arsenal and Chelsea, are believed to account for around a third of that debt.

Wigan chairman Dave Whelan has told the BBC that he is very concerned that spiralling levels of debt will send a Premier League club out of business in the near future.

“I have no doubt it will happen in the Premier League that a club will go into receivership. The debt in the Premier League is horrendous. Wigan have got our debt down to somewhere near £15m, it’s serviceable and we can look after that. Foreign owners will borrow money in the name of the club and will leave the club in debt. Man United owe £750m, Liverpool £500m and Chelsea owe a lot of money too. I think that money should be put into equity, buying shares in the club. If the owner decides to leave, he has to sell his shares. It’s nothing to do with the club and doesn’t put them into serious debt.”

Football League rules state that clubs in financial trouble that go into administration will be deducted ten points as happened to League Two Darlington last month. As a result of financial difficulties last season three league two clubs started this season with huge points deficits. Bournemouth and Rotherham both started with seventeen point deductions and Luton were handed a ridiculous thirty point penalty.

Wisdom

This season the Football League, in their wisdom, have decided to change the rules. Clubs who go into administration after 5.00 PM yesterday will have their ten point deduction suspended.

If the club in question is relegated the points will be deducted from their tally at the start of next season but if the club stays up the 10 points will be taken off their final total, meaning that they would go down if the ten point deduction takes them into the drop zone.

Out of business

There are various predictions being made at the moment about how many professional English clubs are likely to go out of business. I haven’t heard any such predictions around Premier League clubs prior to Dave Whelan’s comments but it doesn’t take a genius to work out that should Roman Abramovich walk away from Chelsea or Abu Dhabi united walk away from Manchester City, the clubs would be in considerable difficulties.

Obviously there are more important things in the world than football (can’t think of any at the moment! :)) Despite that, I am deeply concerned for the game that I love. There are ninety-two league clubs in England and another sixty-eight higher non-league teams who operate on a professional basis.

Beautiful

For many years the rest of the world have looked on in amazement that so many people in England can earn their living from the beautiful game. I have been proud that we can.

It seems very likely that the good times are about to come to an end. Many of the one hundred and sixty clubs are likely to perish over the next few weeks and months. That would be a terrible shame but as long as it continues to be the likes of Darlington and Bournemouth, nobody important will get very bothered about it.

Fall-out

I cannot begin to imagine the fall-out if one of the twenty Premier League clubs were to fall foul of the crisis. Maybe, just maybe, the ridiculous level of transfer fees and salaries would start to be brought under control.

Why don’t the authorities start to sort that out before it is too late?