Football clubs rein in finances

Football clubs have avoided ‘financial meltdown’, despite the huge volume of
scares in recent years, according to a survey of finance directors by PKF.

Mirroring the opinions expressed in Accountancy Age’s football
special in our last issue, PKF’s survey found that football FDs had made inroads
into managing player wages/turnover ratios, and were actively looking for
alternative revenue streams.

Only 21% of clubs felt under more pressure from their bank (compared with 33%
last year and 38% in 2003).

However, ‘rocketing’ ticket prices were unsustainable, according to the
survey.

Ticket revenues were responsible for the biggest revenue growth among 48% of
clubs in the last year. The reliance on revenue from tickets was
considerably greater than the next-highest growth area, TV, which was expanding
for just 14% of clubs. Merchandising and sponsorship revenue each provided the
biggest revenue growth in 7% of clubs.

Stuart Barnsdall, partner in PKF’s football services group, said: ‘Football
clubs can no longer ignore the issue of ticket revenues. There must be a tidal
change in the attitude towards club funding in the next few years, because there
is simply no getting away from the fact that ticket prices cannot continue to
rise at the rate they have.

‘This means costs will have to be cut elsewhere, and the development of other
revenue streams considered. The most obvious place to rein in costs is player
salaries.’

Some 55% of the FDs surveyed rated player wage inflexibility as one of their
major concerns in the next year – a significant increase on last year’s 42% of
respondents. Another 55% of clubs discussed wage capping in the last year,
compared with 64% last year.