Originally posted by askewboy
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WALES’ top two football clubs have been warned they risk “financial catastrophe” by spending their way to the promised land of top-flight football.
In an in-depth survey of football club finance, PKF accountants and business advisers argue that English league clubs have to face up to difficult choices as they look to remain going concerns.
The challenges thrown up by recessionary pressures mean that many clubs are having to dig into their overdraft facilities, with few expecting to make a profit this season, according to the report.
Keith Morgan, partner at PKF’s Cardiff office and a specialist in football and sport finance, warned both Cardiff City and Swansea face “tough times” as they look to build on recent successes.
Cardiff City this week announced it had been in talks to establish a “strategic marketing alliance” with Football Focus Asia.
The club is investigating ways of securing cash from the Far East as it looks to reduce its massive debt – which stands at £24m – accumulated under the reign of former owner Sam Hammam and which has since been added to with the development of its new stadium.
Mr Morgan explained: “These are difficult times for football – that is why Cardiff City is looking outside the UK for new finance; the UK is not full of people looking to invest in football clubs.
“Local companies are not spending as much money in terms of sponsorship and advertising, which is affecting clubs’ finances.”
Cardiff City is one of a handful of clubs to start the season without a shirt sponsor, with the slump in spending on shirt sponsorship even affecting the Premier League.
opps......
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