Bank of England Governor Mervyn King said U.K. football authorities should review how Premier League clubs finance themselves as European and lower-division English teams adopt new rules to put caps on spending.
“They have to think through how they want to organize the finances of football,” King said in an interview on BBC Radio 4 today when asked if the Premier League and Football Association, England’s governing body, should do more to warn of the risks from debt in the sport.
King, who supports Aston Villa Football Club, said so- called financial fair play regulations proposed by European soccer’s governing body UEFA will limit the role money has in deciding performance on the pitch. The rules came in response to rising debt levels across the continent and the effect of cash infusions from wealthy benefactors in its competitions.
England’s Football League, which covers the three divisions below the Premier League, will also introduce similar rules to cap spending, losses and owner investment. They won’t apply to the Premier League, home to some of Europe’s most successful soccer clubs including Manchester United, owned by the U.S. Glazer family, and Chelsea, owned by Russian billionaire Roman Abramovich.
“The great virtue of those rules is that they do give fans for all teams the chance to think that the outcome won’t depend on which team has managed to find some rich person from around the world to come and put money in,” King said. “I think any football fan has seen clubs get into financial difficulties so many times over the years and then rescued by some white knight who comes along, only for that white knight in turn to become the person who is disillusioned and walks away.”
Scotland’s Rangers Football Club was placed in bankruptcy protection in February as HM Revenue & Customs pursued it for unpaid taxes. The club’s administrators have said the club has potential liabilities of more than 134 million pounds ($217 million).
“Lots of them are in debt,” King said, referring to Premier League clubs. “Britain didn’t have a rich person to come along and bail us out and that’s why we’re paying for it, but football clubs seem to find them.”
The governor said Aston Villa, which is fighting to avoid relegation from the top competition this season and faces Tottenham Hotspur on May 6, won’t lose its Premier League status.
“The main thing is the team has got to focus very hard on the match against Spurs,” he said. “Take the chances that will come, there will be chances, and I am confident we’ll stay up.”
To contact the reporter on this story: Scott Hamilton in London at firstname.lastname@example.org
To contact the editor responsible for this story: Craig Stirling at email@example.com