UEFA fears English clubs facing financial meltdown

UEFA, European football’s governing body, fear several Premier League clubs are in danger of financial meltdown if they continue to spend vast sums on signing star players.

With the global economic crisis showing no signs of easing, UEFA general secretary David Taylor is concerned that English teams could pay the price if they over-extend themselves in a bid to remain competitive.

Portsmouth chief executive Peter Storrie has already warned that his club could have to sell more stars to survive as a result of a stalled takeover bid, while Newcastle owner Mike Ashley is unable to find a buyer after his team crashed out of the Premier League last season.

Even the Premier League’s big guns can’t completely ignore the threat of financial crisis. Liverpool’s American owners recently renegotiated the club’s debt with the Royal Bank of Scotland, believed to be 290 million pounds, and have extended it for another year.

The Reds are believed to owe 350 million pounds to RBS and Wachovia, while the Glazer family borrowed 265 million pounds against Manchester United’s assets to buy the Premier League champions in 2005.

Taylor uses the example of Leeds United, Champions League semi-finalists in 2001 but now playing in League One, as a cautionary tale for England’s top teams.

“There are stories concerning some English clubs that are of significant concern,” Taylor told BBC Radio 5 Live.

“There are a number of English clubs where the value of the club itself has fallen significantly and they are effectively on the market.”

“We hope that the clubs themselves will not suffer in any significant way from this but who knows?

“We’ve seen what has happened in recent years with a number of very high-profile clubs, Leeds United for example. They fell into serious financial difficulties by over-extending themselves.

“In this current economic environment, I would never say never to anything like that.

“Clearly we do not see that as imminent but the concern is that we have to establish a stronger financial basis on which clubs can compete.”