Premier League clubs risk implosion warns Ridsdale

FORMER Leeds United chairman Peter Ridsdale has predicted there could be “an implosion” among Premier League clubs if TV revenues diminish or are restructured in favour of the top four or five teams.

Speaking at Manchester-based law firm JMW’s inaugural insolvency conference on the finances of football, Mr Ridsdale (currently interim chairman of Plymouth Argyle, which is itself in administration) claimed there were only two current Premier League clubs with a sustainable model – Swansea and West Bromwich Albion.

“What I think is frightening about football is that everybody assumes that the Plymouth Argyles of this world who are languishing at the foot of League 2 are the problem, but actually we should be more worried about the Premier League and its future.”

He also argued that Manchester United’s business model works “without the Glazers” as the club throws off cash of around £100m per year, but was highly critical of the remainder and of the lack of governance in the game.

“Every other football club in the Premier League is held together by having an individual – or a small number of individuals – at the helm.”

He pointed to Manchester City’s wage-to-turnover ratio of 170% as an example.

“While the Sheikh is there that’s fine, but it is not the basis of a sane business model.

He also pointed to Bolton Wanderers’ debts of £100m at the end of 2010 – a year in which it recorded losses of £32m.

“Were it not for Eddie Davies, I don’t know how a club like Bolton could survive.
Nobody says Aston Villa is badly run but Randy Lerner has pumped over £200m into Aston Villa Football Club. It lost over £79m last year. If that was a normal business you’d be asking questions of its management, but because its run by someone with a big chequebook nobody says anything.”

He said the biggest danger was to relegated clubs without wealthy benefactors who have to contend with TV rights plummeting from £48m to just £4m in the championship and £1m in League One.

He pointed to Leeds United, Southampton and Charlton Athletic as clubs which found themselves in administration after the drop.

“My concern about football is there is absolutely no governance at the top. The Football Association, which is deemed to be the governing body, has no real influence over the Premier League and clearly from what I saw when I was on the board of the FA, the Premier League drives football in this country.

“The Government doesn’t regulate football and the Premier League – in my personal opinion – have no care or consideration about what happens below it.

“Take a club like Everton… You have a chairman who is clearly passionate about the club who has been a fan all of his life supported by – it is rumoured – two high net worth individuals and the acquiescence of his bank. Everton Football Club’s debt levels and overhead structure would not in my opinion survive relegation.

“It is a strange industry. Every day of the week you see highly paid, talented individuals running around…but it is an industry that is teetering.”