Finance and Accountancy Briefing
Open to attack: The annual survey of football club FDs 2011
It has been a turbulent decade for football clubs, during which the banks have been increasingly reluctant to lend to the sector and increase their exposure. Consequently, many clubs have been forced to reduce their transfer fee budgets and invest more in home-grown talent. Not surprisingly, the persistent concerns of finance directors have been the inflexibility of players’ salaries, the loss of TV income and more widespread loss of income that would result from their clubs being relegated.
In this year’s survey, the belt-tightening and financial responsibility themes continue with only 7% of respondents planning to spend more than £10m on non-player capital investment over the next two years; only a third anticipating any growth in sponsorship revenues; and 85% seeking to attract external investment.
Given the continuing fragility of the economy, we asked finance directors how they were protecting themselves against the heightened risk of fraud. Worryingly, more than 90% of respondents do not have any arrangements such as counter-fraud strategies, anti-fraud statements or fraud response plans in place to address this issue.
Also worrying is that only a quarter have an internal audit function, which could mean that clubs are missing out on the potential for process improvements and the ability to exert greater control over their spending.
As the UK economy continues to flatline and the UEFA Fair Play financial rules demanding compliance with the break-even requirement loom closer for the 2012/13 season, it is encouraging that finance directors are focusing on financial responsibility and restraint. However, the majority could do much more to protect themselves against the threats of fraud, poor cost controls and the deepening impact of government cost-cutting on the pockets of club supporters.
To read the full report, please download the full document here now.
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