Fair play rules boost financial reporting at football clubs

Although only 30% of finance directors at British professional football clubs describe their club’s finances as 'very healthy, FDs expect new rules to make it easier to report club finances, BDO research shows

BDO’s report 'A New Dawn for Fair Play?' is based on a survey of 66 teams from the English Premier League, Football League Championship, Football Leagues One and Two, and the Scottish Premiership.

It found that Premier League finance directors are the most positive, with 83% describing their financial position as 'very healthy', while their counterparts in League One were the most concerned as only 14% came into this category.

The research reveals that 85% of clubs expect to comply with new financial fair play (FFP) rules in 2013-14 without any significant changes to their business models, while 10% will need to make major revisions to their financial plans, and the remaining 5% will not comply for at least one further season. 

BDO says the survey also provides strong evidence that FFP rules, which introduce spending restraints, are beginning to change club behaviour. It found that only 17% of clubs are planning to spend more on payroll costs for the first team squad, compared with 24% last season, and 56% are expecting to spend less.

Of the 83% of clubs planning to spend less or the same on payroll costs, 42% revealed that their decision was influenced by FFP, and FFP was a factor for 86% of Premier League and 77% of Championship teams

Twice as many (24%) of clubs plan to reduce their transfer budgets this season compared to the 12% who plan to increase spending in this area. Premier League (44%) and Championship clubs (41%) both identify FFP as a key driver in this decision.

BDO partner Trevor Birch said: ‘The divisions below the Premier League are crying out for a sustainable business model. Football clubs play a vital role in their local communities, so there is a clear need for greater financial stability and a higher proportion of clubs living within their means. The initial signs suggest that clubs are taking the new requirements seriously and beginning to adapt their behaviour in the way the football authorities intended, which is encouraging.’ 

Liverpool football club, which announced £90m of losses between 2011-2013, has just learned it will not be excluded from next year’s UEFA competition as a result of failing to meet FFP rules. .

UEFA has confirmed that while 76 of the 237 clubs they are currently investigating do face being disqualified from the Champions League and Europa League, clubs who did not take part European competition this season are not at risk.

Pat Sweet |Reporter, Accountancy Daily [2010-2021]

Pat Sweet was the former online reporter at Accountancy Daily and contributor to the monthly Accountancy magazine, pub...

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