Member Article

Yorkshire football clubs getting to grips with new financial regulations - BDO

As pressure mounts on benefactors to plug funding gaps and keep clubs competitive on the pitch, owner exits can be expected outside the Premier League during the next two seasons, according to new research from BDO.

However, most Yorkshire football clubs are on track with the so-called ‘financial fair play’ (FFP) regulations, according to the report ’A New Dawn for Fair Play?

The BDO survey, which saw 66 FDs from all professional divisions interviewed, reveals that 85% of clubs expect to comply with FFP rules in 2013/14 without any significant changes to their business models.

However FFP compliance is still the third most pressing concern for Premier League and Championship clubs, with 83% planning to spend less or the same on payroll costs this season.

In addition, only 12% of clubs expect to increase their transfer budgets with almost half of clubs in the Premier League and Championship (44% and 41% respectively) saying FFP is a key driver in this decision.

The survey reveals that only 30% of finance directors describe their club finances as ‘very healthy’ - although there are marked differences between the divisions, with Premier League finance directors the most positive (83% describing their financial position as ‘very healthy’) and their counterparts in League One the most concerned (14%).

The survey also reports a growing reliance on benefactors to plug funding gaps at clubs.

In total, 65% of clubs acknowledged a dependence on principal shareholder(s) to finance operating losses compared with 58% last year; for the Championship the figure is 94% and for League One it is 64%.

Faced with the challenge of plugging a funding gap while also keeping the club competitive on the pitch, it is perhaps not surprising that 28% of Championship club owners and a third (36%) of League One club owners are considering a full or partial exit in the next 12 to 18 months.

Billy Cairns, Yorkshire-based partner in BDO LLP’s Professional Sports Group, said: “The divisions below the Premier League are crying out for a sustainable business model.

“Football clubs play a vital role in Yorkshire and in local communities, so there is a clear need for greater financial stability and a higher proportion of clubs living within their means.”

This was posted in Bdaily's Members' News section by Mark Lane .