Clubs on the brink.. - Eternal Allegiance

ForeverInLoveWithJus · 10-22-2002, 02:23 AM

While the Premiership continues to prosper, clubs in the Nationwide League are feeling the pinch.
Leicester are in financial meltdown while Coventry and Watford are the latest to ask their players to take a pay cut, as they struggle to adapt to life away from the gravy train.

We look at the prospects for six clubs who are finding life tough outside the top.

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Leicester

The debt: £30m

The problem: The club have applied to go into administration in order to deal with their debts.

Leicester today
Founded: 1855
League position: 3rd - Division One
Average home gate: 28,641
Their problems stem from relegation from the top flight, the £35m they spent on a new stadium - for which they took out a £28m loan - and players' wages.
The final straw came after being handed a £1.5m tax bill.

The solution: Players rejected a 20% pay cut, but agreed to defer signing-on fees.

Leicester have off-loaded several of their highest earning players but due to the collapse of the market, they fetched only £8.5m.

Club chairman Greg Clarke said: "While this is a severe setback, (administration) does not mean the end of Leicester.

The future: The share price dropped from 110p to 7.75p before trading was suspended.

BBC presenter Gary Lineker is behind a consortium to take control of the club. Beyond that, their future is uncertain.

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Barnsley

The debt: £3m

The problem: Relegation from Division One and the loss of the ITV Digital money have left Barnsley with a payroll of £5m a year, other costs of £2m - and income of only £4.5m.

Barnsley today
Founded: 1887
League position: 20th - Division Two
Average home gate: 9,846
A fortnight ago, a consortium intending to take over the club failed to secure sufficient bank funding and last week Barnsley called the administrators in.
They have been given a deadline of just eight weeks to bring a buyer in.

The solution: Administrator Matthew Dunham, who on Tuesday axed Tykes boss Steve Parkin, says, "This club needs investors to take on the expected shortfall, and we have had several expressions of interest.

"I am looking for the fans to rally round and provide the money to keep the club going, and try to avoid job cuts or renegotiations with players."

The future: "If we improve results then attendances will improve and, with that, the financial position of the club," says Dunham.

"What we are looking for is someone who will concentrate on refinancing the existing loans or take them over."

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Coventry

The debt: £59.6m - at the last AGM.

Coventry today
Founded: 1883
League position: 7th - Division One
Average home gate: 14,706
The problem: High wages and a spending spree backed by previous chairman Bryan Richardson was followed by relegation.
The solution: The club have asked the players to take a 12% wage cut over the next two years that will be repayable if their financial situation improves.

The future: The board have a business plan that has been accepted by the bank and they hope the latest accounts will show the debt is down to £30m - £15m of which is in directors' loans.

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Derby

The debt: £20m

The problem: Relegation from the Premiership proved a disaster due to the number of players on high wages and long-term deals. The club was late in paying the players' wages in August.

Derby today
Founded: 1884
League position: 12th - Division One
Average home gate: 26,923
The solution: Two takeover bids by former directors of the club have failed to materialise. Mart Poom and Malcolm Christie were both subject to big-money offers but the club decided not to sell.
The future: The club appear to have got the bank on their side and have no intention of going down the administration route.

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Sheffield Wednesday

The debt: £20m

The problem: The club invested heavily to stay in the Premiership and paid too many players too high wages.

Wednesday today
Founded: 1867
League position: 21st - Division One
Average home gate: 22,004
The solution: The board has enough funds at its disposal to keep the club afloat until the end of the season, when many of the bigger player contracts come to an end.
They are also hoping to sell their training ground, which should raise £5-10m.

The future: The club believe they can keep a tight rein on the debt until the end of the season when they can dramatically slash their wage bill. Chief executive Alan Sykes has ruled out administration as an option.

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Watford

The debt: Cleared

The problem: The club say they need to raise a £9.5m shortfall in revenue after the collapse of the ITV Digital deal.

Watford today
Founded: 1881
League position: 6th - Division One
Average home gate: 11,435
The board backed former manager Gianluca Vialli with money in the hope of a quick return to the Premiership which never came.
The solution: The board will provide £6.3m, but they still need to find another £3.2m.

The players agreed to a 12% pay cut which is expected to save the club £1.3m.

The club are also hoping to release some more shares and hope to raise more money through shares and donations.

The future: The club are over the worst but administration remains a "spectre looming", according to a club spokesman.

ForeverInLoveWithJus · 10-22-2002, 02:25 AM

More than 90% of English football clubs have serious financial problems, a leading analyst has told.

Football analyst John Williams is just one of many experts who believe the British game is being crippled by the perilous state of its finances.

"Seven or eight Premiership clubs are probably safe but after that there are very few clubs who look sensible in the way they're structured financially,"

"There are very few clubs who spend the right proportion of their income on wages - they all to spend too much and they have got to rein that in."

The 'safe' clubs
Arsenal
Blackburn
Liverpool
Manchester United
Middlesbrough
Newcastle United
Tottenham Hotspur

In recent months, a string of clubs have been rocked by serious financial problems, with Leicester City the latest to face administration.

Barnsley have eight weeks to find a buyer while Coventry have debts estimated at £60m.

According to Williams, of the 72 clubs outside the Premiership there is barely a single one unaffacted by the crisis.

When First Division chairmen and chief executives were asked at a recent meeting how many of them could guarantee fulfilling fixtures this season, only three raised their hands - Wolves, Portsmouth and Norwich.

The Football League admit the crisis is "the biggest to ever hit football", but refused to be drawn on how many clubs might also be in danger.

"It's difficult to say that 90% of clubs have financial problems because 'financial problems' is a fairly loose description," said John Nagle, a spokesman for the League.

"You have Fulham for example who are in debt but look at their benefactor Mohamed Al Fayed. Wigan, likewise, have a wealthy backer in Dave Whelan.

Hearn says football's future is gloomy

"That's not to downplay the problem. This is one of the biggest crises to ever hit football."

The "crisis" could yet rip through the heart of clubs across the country, according to Leyton Orient chairman Barry Hearn.

Hearn said recently: "I would not be surprised to see half of the First Division clubs in administration by Christmas."

Williams, director of the football research unit at Leicester University, believes top-flight clubs like Fulham and Southampton could face similar problems should they be relegated in the future.

"I don't see this going away. The cases of Leicester and Coventry may well make people look much harder at their finances," he said.

"Half of the current Premiership clubs might well be in the same boat as a Leicester or a Coventry in the near future."

André_ea · 10-22-2002, 03:48 AM

its a problem more and more clubs all over the world have to face, not even the best clubs are aware of it, a lack of money is a general problem and its hard to work on it

i guess every country/league tries to handle that itself but its for sure not easy and if the situation wont become better it will be really tight for some clubs in teh end

ForeverInLoveWithJus · 10-22-2002, 03:51 AM

its all to do with the collapse of ITV digital

André_ea · 10-22-2002, 03:57 AM

oh ok, i am sry but i didnt hear about that, can u tell me?

ForeverInLoveWithJus · 10-22-2002, 03:59 AM

ITV digital promised the football league millions of pounds and then never payed cos of the company went bankrupt

André_ea · 10-22-2002, 04:03 AM

oh right, i heard about that, just couldnt remember anymore

actually germany had teh same problem with a tv channel that went bakrupt and b4 that had happened the channel used to give the league millions

ForeverInLoveWithJus · 10-22-2002, 04:09 AM

They gave some money but not a lot

André_ea · 10-22-2002, 04:13 AM

what about irish clubs and their debts?

ForeverInLoveWithJus · 10-22-2002, 04:18 AM

Not as bad, we are in good finance..