Move throws soccer clubs into crisis

Cliff Feltham12 April 2012

FOOTBALL experts have warned it will be virtually impossible for clubs to make up from elsewhere the crippling loss of their ITV income.

Clubs in football's three lower leagues face the biggest financial crisis in their history, following the ITV Digital administration. The clubs have mortgaged themselves to the hilt, paying huge wages to players, in a quest to reach the golden pastures of the Premiership.

Without the TV money, 30 to 50 clubs could collapse. Portsmouth, one of the first to react, called ITV's move a 'massive blow' which would cost it £3m. Like many clubs, it will now be forced to rely on its chairman, Milan Mandaric, to keep it going.

Mike Jervis, head of insolvency at accountants Grant Thornton, said: 'Clubs can try to sell more merchandise, increase gate prices, but it will not be enough.'

The clubs have had £133m from ITV, with a further £89m due in August. The final £93m was due in 2004. Clubs could face protracted legal disputes with players if they try to renegotiate contracts. For many, wages soak up 80% of income.

One analyst said: 'No firm should be dependent on one source of income, and that is precisely the position football clubs got into.'

The news adds urgency to Birmingham City's efforts to win promotion to the Premiership. The shares eased 2p to 19p. Sheffield United held at 6 3/4p, valuing it at just £3.3m.

Bigger clubs are unlikely to escape the after-shocks. An analyst warned: 'There will be one less bidder for the Premiership rights next time.'

Create a FREE account to continue reading

eros

Registration is a free and easy way to support our journalism.

Join our community where you can: comment on stories; sign up to newsletters; enter competitions and access content on our app.

Your email address

Must be at least 6 characters, include an upper and lower case character and a number

You must be at least 18 years old to create an account

* Required fields

Already have an account? SIGN IN

By clicking Create Account you confirm that your data has been entered correctly and you have read and agree to our Terms of use , Cookie policy and Privacy policy .

This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.

Thank you for registering

Please refresh the page or navigate to another page on the site to be automatically logged in