Time for clubs to wake up to reality

CLUBS must emerge from an 'Alice in Wonderland' dreamland of counting on TV incomes rising each year after the loss of the Football League's compensation claim against Carlton and Granada.

That is the view of players’ union chief Gordon Taylor, who has called for the game’s governing bodies to have more control over clubs’ finances as they are forced to re-enter the real world.

The chief executive of the Professional Footballers’ Association was reacting to the loss of the League’s legal bid to recover £131.9m from Carlton and Granada, the parent companies of the now defunct ITV Digital.

And after helping Bradford narrowly avoid the threat of liquidation yesterday, Taylor believes the club should now stand as a ‘‘lesson to others’’ in the dangers of gambling on success with huge wage bills.

‘‘It is a question of changing mind-sets. We have to realise that the TV bubble is not going to get any bigger,’’ he warned.

‘‘It is time for clubs to face up to the harsh reality of not spending any more money than is coming in.

‘‘It is not just a question of management skills these days, but financial management skills.

‘‘I don’t want to paint too much of a gloom and doom picture as the irony is that the game hasn’t ever been more popular.

‘‘But clubs that have been living in an Alice in Wonderland world thinking that TV revenues would go on rising forever must realise that what goes up must eventually come down again.’’

The Football League has yet to decide whether to appeal against the High Court ruling, although its legal bill has already topped £400,000 and it is liable for the costs of Carlton and Granada.

With a total bill already of around £1m, it may be that directors decide at their board meeting next Tuesday to look to the future instead.

Chairman Keith Harris and chief executive David Burns will no doubt come under further fire for their handling of the case, but have already vowed not to be forced out of their jobs.

Another option for them is to consider suing the legal advisers who acted for the League when the contract was entered into with ITV Digital without a written financial guarantee from the parent companies.

Taylor nevertheless believes the impact of this case should spread much wider, ensuring that the Football League, Premier League and Football Association start to exert stricter control over clubs’ finances.

This could theoretically involve clubs being unable to start a season unless they can prove their financial stability, similar to rules which are due to come into force for European competitions.

Taylor explained: ‘‘There needs to be greater control of the financial stability of clubs from the centre. Clubs should not be allowed to spend money they haven’t got.

‘‘The FA are already attempting to do some monitoring but there need to be more assurances for spectators that a club will finish a season when they have started it.’’

Speculation has also been renewed as to a possible breakaway of leading First Division clubs to form a 'Premiership Two'. However, Taylor insisted: ‘‘I don’t believe there will be a breakaway as the Premier League will not want to dilute their own revenues.’’

Whether a string of lower league clubs do go under remains to be seen, although there are already several others, apart from Bradford, in severe trouble. For while First Division clubs will lose £2m a year from their original TV deal, the losses for Second Division teams will be £450,000 per annum and up to £300,000 a season for Third Division clubs.

League chairman Harris also warned that teams relegated from the Premiership could struggle to adapt to such tight financial conditions, even though they benefit from 'parachute' TV payments to lessen the impact of their fall.

Ipswich chairman David Sheepshanks reflected that the omission of a written guarantee in the final contract with ITV Digital had ‘‘proved hideously costly to the fabric of football’’.