Football League clubs battling to control costs
FOOTBALL clubs are trying to keep their costs under control, despite player wage inflation, according to a survey of finance directors by accountants and business advisers PKF.
The firm commissioned research of more than 40 finance directors from across a wide range of English league clubs and the Scottish Premier League.
The report, entitled ‘Open to Attack’ reveals that clubs face uncertain revenues and new financial regulations, principally the UEFA Financial Fair Play rules and similar rules for Football League teams.
It highlights a number of challenges clubs are facing; although ticket sales remain the most important source of revenue more than half (51%) of respondents reported a fall in matchday sales last season.
Merchandising sales are under pressure too – 54% of clubs stated that revenue in this area had fallen.
The survey found that clubs are responding to economic and regulatory pressures by taking a firmer grip of player-related expenses – only 20% of FDs said their clubs intend to increase their first team payroll this season, compared with a peak of 59% in 2008.
Trevor Birch – head of corporate recovery at PKF and the former chief executive of a number of clubs including Chelsea, Everton, Leeds United, Derby County and, most recently, Sheffield United – said: “The absence of a meaningful economic recovery and looming financial fair play rules are forcing clubs at all levels of the professional game to peg their costs more closely to revenues, which remain under serious pressure.
“Merchandising income has been particularly badly hit as fans, struggling with rising inflation and an uncertain economic outlook, are being forced to view the latest replica shirt as a luxury rather than a necessity.
“We are also seeing the polarising of sponsorship, with only a small number of top Premier League teams having the profile and strength of brand to attract marketing spend from major corporations.”
Looking ahead, he said the firm did not expect any of the main revenue streams to show meaningful improvements. Therefore, clubs would have to continue to batten down the hatches for the foreseeable future.
