The moment I ring the FA Premier League’s doorbell and enter the reception hall of one of the world’s richest and most prestigious football leagues, it’s not immediately obvious that the reputation of the beautiful game’s finances has just undergone a hugely significant turning point.

Just 10 days before the start of the new football season, Leeds United – a club that has become synonymous with millions of pounds’ worth of debts, sky-high players wages and financial mismanagement – moved out of the red to pay off its creditors, two years after it was relegated to the Championship in 2003/04.

It’s only when you reach the spacious office of Javed Khan, director of finance and administration for the FA, that the sense of relief is palpable.

It’s not just that the once-proud Yorkshire club has finally seen the light at the end of the tunnel, but because Khan is confident there will never be a repeat of the affair within the 13-year-old Premier League.

‘The Leeds situation may have contributed to rule changes, but it is more important to view this as a series of safeguards to ensure against another one of these examples happening again. What we are now saying to clubs is that, if you step out of line, not only will you pay a financial penalty, you will pay a sporting penalty,’ Khan says.

His prognosis on the possible punishment clubs face over financial mismanagement may sound harsh, but Khan knows that the Premier League’s 21 shareholders – the 20 clubs and the Football Association – are firmly on his side.

‘The Premier League and the clubs themselves have voted in certain rule changes aimed at alleviating financial problems. For instance, we introduced an insolvency policy where any club that falls into insolvency is automatically deducted 10 points. There are no ifs, buts and maybes – 10 points is a lot and can make a big difference.’

Khan meets with the finance directors of the 20 Premiership clubs on a quarterly basis and says the group is united in firming up the league’s financial management issues.

‘The idea was to focus the minds of those that run the clubs and say: “You have to manage you financial affairs prudently not recklessly, because if you do not you will suffer the consequences”.’

The Premier League also introduced a ‘fit and proper person test’ to vet future football club directors.

This is particularly pertinent at a time when the DTI is considering whether to take action against former Leeds Utd chairman Peter Ridsdale, among other senior personnel at Elland Road,. ‘You can’t be a director of a club if you’ve been involved in two insolvencies,’ Khan says firmly.

It is now clear that football authorities are acutely aware just how perilously close some clubs have come to closing the turnstiles for good, and Khan says there is a ‘conscious effort’ to eradicate this aspect from the game.

‘Financial management is a top priority,’ he says. Despite the Premier League’s fear that a one-size-fits-all approach may not be the best solution on a European level, Khan is pleased with UEFA’s commitment to step up its vetting process by introducing a special licence.

‘Since last year – now the second year of UEFA licensing – clubs can only take part in a UEFA competition if they hold a licence from their national association or professional league. UEFA’s criteria looks at coaching, youth, ground plans and personnel, but also crucially at finance.’

Finance is both the byword and backbone of the League. Ever since the powers that be in football – including the top clubs, the financial brains and the satellite broadcasters – woke up to the fact that the formation of the Premier League could generate vast revenues, English football has become one of the biggest collective sporting businesses in the world.

The Premier League’s revenue generation from TV rights is one of the main reasons for the body’s existence (handing 90% to the clubs), and is also the single largest factor for the financial leap that English football has made in a decade.

Thanks to TV cash generated principally from BSkyB, as well as rising overseas monies, the League’s turnover has leapt from £45m in 1992 to nearly £650m in its last accounts, for the 2003/04 financial year.

The most startling figure, however, is the broadcasting rights contract handed to Sky since the formation of the League.

In 1992, a five-year deal was signed for £200m, big money you’d think, but in 2004 the broadcaster penned a £1.5bn three-year contract that still has two years to run.

Khan says the days when football was struggling with crumbling stadia, low attendances and small commercial revenues are a thing of the past, and he is confident that increasingly high amounts of money can be generated from broadcasting.

‘When British Satellite Broadcasting and Sky merged together to form BSkyB, the company realised the way to make it all work was by focusing on sport and football in particular. Football suddenly said: “This is great, we’ll finally get our due share of the commercial revenues that are out there.”’

Khan is reluctant to say whether he believes Sky will re-sign the deal, particularly as the EU has ruled the contract as ‘anti-competitive’ and ordered the Premier League to split the next set of rights into packages and sell them to separate broadcasters.

Terrestrial television and other broadcasters, including Setanta/Telewest, which employs Sky’s former FD Richard Brooke, are rumoured to be interested. Khan says an ‘educated guess can be made about who has the most power’, but insists the bidding process will be ‘competitive’.

Khan is no stranger to sport and has been involved in the field for 17 years. After five years with the now-defunct insolvency firm Casson Beckman, he responded to a job advert in 1988 in Accountancy Age for a part-time qualified accountant at the British Olympic Association.

Indeed a large retro 1948 London Olympic poster hangs on the wall of his Premier League office.

Khan’s arrival at the BOA was well timed, with the first cash installments of TV contracts flowing through every worldwide Olympic organisation’s letterbox. ‘The former head of the International Olympic Committee, Juan Antonio Samaranch, did an amazing job of increasing TV revenues,’ he says.

The BOA, which had previously been run as an organisation that raised funds for taking a team to the games, and then ran a fairly small organisation in between the games, suddenly had a large income of between £5m and £6m a year.’

Khan also joined the BOA just as the GB team was flying out to the Seoul Games, and remembers the strangest cost he ever accounted for. ‘One thing that struck me was the £400,000 airfreight cost of transporting horses out to Korea – but at least we won the hockey that year,’ he says with a smile.

But it was his overhaul of the association’s IT accounting procedures that revolutionised the BOA, and the way it runs its finances, perhaps even paving the way for the winning 2012 London bid, I suggest. Khan laughs off this suggestion in good spirits.

‘They didn’t have the administrative infrastructure in those days and used to present their accounts and report how much cash they held and that was it,’ he says. ‘So I introduced a budgeting and reporting system, computers, took them into IT, set up an IT network, appointed an IT manager and then started reporting properly on the association’s finances at board and national Olympic committee meetings.’

Khan’s speaks passionately about London’s chances of holding a successful Games and he admits to being glued to his television during the 6 July bidding process in Singapore. But he shies away from answering whether he would apply for the 2012 FD job.

‘All I’m able to say is that I’m very happy in my present job. But if the call ever came from the London Olympic organising committee, I would be flattered and give it the proper consideration such an honour deserves.’

Deep down, you get the feeling that every time Khan stares in wonder at the multi-coloured rings on his 1948 Olympic poster it crosses his mind. Frankly, when it comes to career decisions, it’s hard to imagine two better options to have to choose between.

SEVEN-YEAR ITCH

Khan was an accountant with the British Olympic Association. He explains how a ‘crazy’ seven-year tax battle with the Revenue finally paid off:

‘Soon after the 1988 Olympic Games there was an article in Accountancy Age with the headline “Taxman gets Olympic Gold”. This was the issue of the day because the Inland Revenue took the view that the costs of taking the British team to the Games were non-deductible.

‘Not only did this mean that the BOA was probably the only national association that didn’t have any government support, but it was also being taxed on its income and not its profits.

‘The only deduction it allowed was a very narrow band of direct commercial expenses – that is the people employed in the commercial department, fundraising activities and so on – because a lot of money was coming in.

‘If we had then paid tax on our income and spent the money on the Olympic programmes we were running, we would have run into losses and wound up insolvent, because the tax would have been greater than our net profit – it was crazy.

‘We opened discussions with the Revenue and they went on and on. Eventually the special commissioners decided the BOA had its trading and non-trading activities so intertwined that they could not be separate, and they agreed that all our costs could be deducted.

‘The commissioner said there was a calculation to be done but that there was very little tax to be paid and we won the day. That took the best part of seven years to achieve.’