A quarter of clubs says finances are 'cause for grave concern'

Coventry City fans
Coventry City are currently playing their home games at Northampton

Almost a quarter of British football clubs say their finances "need attention or are cause for grave concern", according to a BDO report.

And 94% feel the gap between larger and smaller clubs is widening.

The wealth gap being exacerbated by TV revenue, brand power and new Financial Fair Play rules is also of concern.

"The success of the Premier League has tended to concentrate wealth in the hands of the few at the expense of many," said Trevor Birch of BDO LLP.

The accountancy and business advisory firm spoke to finance directors at 67 clubs from across the English Premier League, Football League Championship, Leagues One and Two and the Scottish Premiership.

Aaron Ramsey, Emanuel Adebayor, Daniel Sturridge, Diego Costa, Serio Aguero, Wayne Rooney
Almost all respondents (94%) to the survey also felt the wealth gap between larger and smaller clubs is widening

The report argues that, while Financial Fair Play (FFP) rules should assist in promoting sustainability, they may also have the unintended consequence of creating further disparity between clubs as the wealth gap across and within the leagues continues to grow.

As the divide has widened, major sponsors have concentrated their spending on a handful of clubs with brands capable of giving them global coverage.

As a result, clubs in the Football League, and even those clubs outside the Champions League places in the Premier League, are finding it increasingly difficult to attract lucrative sponsorship deals.

"Polarisation of the industry has to be taken as a serious issue when considering sustainability and the long-term health of the game as a whole," added Birch, who oversaw the administration and subsequent sale of League Two side Portsmouth.

Major issues identified by chief financial officers include the squeeze on matchday income and inflexibility in player wages, together with increased parachute payments in the Football Leagues.

In fact, 21% of Premier League respondents think that their owners are considering a full or partial exit in the next 12 to 18 months, compared with none in 2013.

The report adds that 90% of clubs said they had complied with new FFP rules and thought they were workable, while 57% of respondents were either not expecting to make a profit in their next accounting period, or were unsure if they will, indicating that loss-making is still rife.

"The top six or seven clubs in the Premier League will be able to consolidate their superiority with bigger and better global commercial deals," added Birch.

"The rest of the league then struggles to grow revenues outside the central media deal and faces a perennial relegation battle, with the consequent uncertainty that brings for long-term planning. FFP is unlikely to change this scenario.

"However, the recent increase in parachute payments to clubs relegated from the Premier League, which are not included in FFP calculations, may start to have a greater distorting effect on competition in the future and effectively create a two-tier league."

Speaking in response to the report Supporters Direct, who help fans to set up trusts to gain influence in the running and ownership of clubs, said it was "time to act".

Supporters Direct's response to the report
"There's a significant statistic in the BDO report - that 21% of owners seeking to sell up in part or full in the next 12-18 months. Let's not forget that these are the people who write the rules, and in the end bear a great deal of responsibility for the game being in the state it is."

A spokesman told BBC Sport: "There's a significant statistic in the BDO report - that 21% of owners seeking to sell up in part or full in the next 12-18 months. Let's not forget that these are the people who write the rules, and in the end bear a great deal of responsibility for the game being in the state it is.

"Yet nearly a quarter of them are deciding on things that in a year they might have no interest in. That's the kind of short-term thinking that has got football into the financial state it is.

"Our own ICM Research recently showed that only 18% of fans believed that football clubs are financially well run, and that nearly 50% wanted the FA to intervene to 'fix a broken game'.

"We've got a parliamentary report, carried out a couple of years ago, that addressed many of these problems, and offered the kind of radical, long-term changes that we need, and yet much of football still seems determined that it'll largely be 'business as usual'.

"It isn't business as usual; football's had enough wake-up calls."

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