FFP may have a bite worse than its bark

[davenportram]

I know some people reckon FFP is all words with loopholes and won't stand a court challenge.

However 1 out of 3 championship and league one owners are considering selling up due to it.

http://news.sky.com/story/1127965/financial-fair-play-football-clubs-strained

Almost a third of football clubs in the Championship and League One could sell up in the next 12 to 18 months, according to a new study.

Following the launch of Financial Fair Play (FFP) rules, which aim to regulate football finances, 65% of clubs surveyed said they rely on funding from principle shareholders to stay afloat.

It comes as many continue to feel the squeeze struggling with funding gaps, while staying competitive on the pitch.

The study, by accountancy firm BDO, surveyed 66 teams from the English Premier League, Football League Championship, Football Leagues One and Two and the Scottish Premiership.

According to the research, 28% of Championship club owners and 36% of League One club owners are considering a full or partial exit in the next season.

Trevor Birch, a business restructuring partner in BDO's Professional Sports Group, said: "Intense competition for a limited number of promotion places has pushed the majority of Championship and League One clubs into the red and created a dependency on principal shareholders bankrolling trading shortfalls.

"In this context, we now see around a third of existing owners seeking a full or partial exit.

"While a similar proportion of clubs are being approached by new external investors, in reality there is a dwindling number of genuine potential owners outside the Premier League."

However, the study also suggests that some clubs are starting to come to terms with Financial Fair Play, with 85% expected to adhere to the rules in 2013/14 without changing their business models.

And 10% plan to meet the regulations following major revisions of their financial plans, and the remaining 5% will not comply for at least one further season.

Mr Birch added: "Though many would prefer the sport to find its own sustainable financial equilibrium, the pressure on clubs and their owners for success has not allowed this to happen.

"This is why it is important for the FFP regulations to be embraced not just in letter but in spirit."

He said: "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."