Football league chairman Greg Clarke has told the Commons committee investigating football that clubs are heading for a ‘debt precipice’. Interviewed later on Radio 5, he said that debt was on the increase and even if one took steps to cut it now it would be five years before any effect was seen. At the risk of repetition, it is perhaps worth pointing out that what matters with debt is not its absolute size but whether you can service it.
Football league chairman Greg Clarke has told the Commons committee investigating football that clubs are heading for a ‘debt precipice’. Interviewed later on Radio 5, he said that debt was on the increase and even if one took steps to cut it now it would be five years before any effect was seen. At the risk of repetition, it is perhaps worth pointing out that what matters with debt is not its absolute size but whether you can service it.
In his Radio 5 interview, Clarke pointed to the fact that League 2 clubs had agreed to a protocol that limited spending on wages to 60 per cent of turnover. They were hoping to extend that arrangement to League 1, although one could infer that some resistance was being encountered. Eventually the scheme could be extended to the Championship although it was also hoped to introduce a version of the Uefa financial fair play rules there that would require clubs to break even over five years.
The interviewer suggested that what was need was an imposition of rules given the difficulty of achieving consensus, but Clarke insisted that the Football League was a democracy not an autocracy. There were seventy-two sovereign businesses and although it was difficult to gain traction at first, it was better to win clubs round to such arrangements rather than impose them.