Football: Clubs will go under unless they are more prudent, warns Football League boss
GREG Clarke fears a Football League club will go bust within the next two years unless the sport's parlous finances are addressed.
Clarke, who replaced Brian Mahwinney as league chairman in March, issued the warning on a visit to Crewe Alexandra for a tour of the club's Gresty Road ground and Reaseheath training facilities.
The 52-year-old has met officials from 35 clubs since his appointment, and he admits financial concerns have proved to be a common concern.
Sheffield Wednesday, who are believed to be £27m in debt, are the latest club whose existence is being threatened, and Clarke is hoping their plight will help to act as a wake-up call to others.
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"Sheffield Wednesday have one of the biggest grounds in the country, are attracting 20,000-plus crowds, but are saddled with huge debts," said Clarke.
"It is not a danger that a club could go bust – it is a probability unless we change our ways.
"We've already lost Chester City in recent seasons and others, such as Stockport, have been really close.
"We have to address some of the fundamental problems, primarily the fact we spend too much money.
"Finances are fragile. They have been for the last 10 or 15 years because clubs are spending more on their player budgets."
Prior to his appointment as the Football League figurehead, Clarke was chief executive of Cable and Wireless and headed Australian property firm Lend Lease, who are building the London 2012 Olympic village.
He may be used to dealing with businesses which register profits, but is now faced with helping clubs who are living beyond their means.
Clarke has first-hand experience of life in the front line after spending a short spell in 2002 as chairman of Leicester City – the club he supported as a boy.
"Chasing the dream is fine," explained Clarke, "and if you've been in a position of responsibility at a football club you are under a lot of pressure.
"The crowd always want more and better – that's human nature because they want their team to win. The temptation is to spend more than you can afford.
"You think 'if we win a few more games, we'll get it back'. But if you don't you start to dig a hole and it gets deeper and deeper."
The distribution of finances among the 72 clubs has often caused consternation to chairman at the bottom of the ladder.
A new deal to provide £48m in "parachute" payments over four years for clubs relegated from the Premier League was agreed earlier this year.
But on average, Championship clubs receive £2.2m per year, with League One and Two clubs banking just £325,000 and £250,000 respectively.
Clarke says one of his main aims is to increase the amount of money flowing down to Football League clubs.
"League Two clubs don't get as much as they need and I would like to generate more revenue for our clubs," he explained.
"Our job is to get the most out of sponsorship, media rights and other commercial opportunities, spend as little as we can, and then distribute all that money to clubs.
"But clubs must be run wisely. The majority are, although a few get a bit too close to the edge.
"All the clubs are independent businesses and you can have conversations with them about finances.
"However, they have to make their own decisions because, as directors of an independent business, they are legally responsible."
Clarke points to Crewe's example of developing players through their Academy system and selling them for big money as a lesson for all clubs.
Strikers Dean Ashton and Nicky Maynard have emerged from the Alex production line over the last 10 years and then been sold on for seven-figure fees.
"If you invest in quality people and quality facilities, you get quality output, and Crewe is a great example of this," he explained.
"The number of players who have come out of Crewe under Dario Gradi is legendary.
"To be frank, that has kept Crewe in business for the last 20 years. It is an excellent strategy, well executed, with good people – and that's all you can ask of any business."
Clarke also identified the need to develop a long-term plan for the future prosperity of the league.
But he warned that clubs must look forward if they are to emerge from the current tough economic climate.
"I want to work with the league – in terms of the board and management team – and club chairmen and directors to develop a picture of where the league wants to be in five, 10 and 15 years, and then develop a plan to get there," he added.
"One of the strengths of football is its heritage, but one our weaknesses is that we are backwards looking.
"People still think back to when players had long shorts and wore hob-nailed boots – we can't reinvent those days.
"The world has moved on – globalisation of the economy, media rights, 200-channel televisions, the internet.
"It is a question of building on all this because we've got a good product.
"We've got to plan to prosper in this new world and evolve."