94% of England's clubs lose financially

An independent football regulatory body said in a report, issued on Tuesday, that English clubs face increasing financial risks, after concluding that 94 percent of the top five division clubs are recording losses.

The authority, which was established last year, proposed tightening controls on spending and requiring clubs to develop emergency plans, as part of a 6-point plan aimed at enhancing the financial sustainability of the game in England.

The draft “State of the Game” report, which will undergo public consultations for 8 weeks before issuing its final version, showed that about two-thirds of the English Football League and National League clubs are suffering from “financial insolvency.”

The authority added that an increasing number of clubs have become dependent on funding provided by owners to ensure their continuity, warning that this reality has led to “a worrying combination of high debt and excessive reliance on owners’ funds, which exposes the clubs and their fans to danger.”

She also stressed the need for clubs to manage their financial risks more effectively, and to develop alternative plans to deal with any decline or cessation in support for owners.

David Cogan, head of the Football Regulatory Authority, said: “While some of our clubs are among the richest and most competitive in the world, others are on the brink of financial crisis.”

He added: “A large number of clubs informed us that they would not be able to survive if their owners decided to withdraw their support. “This lack of financial flexibility can no longer be ignored.”

The English Premier League announced its support for what was stated in the report regarding the preference for “a solution led by the football system itself to distribute revenues.”

He said in a statement: “As the report makes clear, any additional funding must be coupled with effective financial controls and broader reforms that enhance the strength and stability of clubs.”

The Premier League is currently in negotiations with the English Premier League, which supervises the three divisions immediately below the Premier League, to reach a new agreement regarding revenue sharing.

Media reports stated that Premier League clubs offered to provide 1.8 billion pounds ($2.38 billion) over 10 years, in addition to current funding, while the English Premier League demanded one billion pounds sterling within 5 years.

The Premier League added: “We believe that the proposal we submitted to the English Football League, which was approved by all Premier League clubs in July, achieves the goals set by the Football Regulatory Authority in its report.”

He continued: “We remain committed to reaching a long-term partnership with the English Football League, which is fair and generous and achieves a balance between the interests of all clubs.”