Oct 13 : English soccer clubs are "dangerously exposed" to financial risk, the country's Independent Football Regulator said in a report released on Tuesday, after finding that 94 per cent of clubs in the top five divisions were operating at a loss.
The IFR, established last year, proposed stronger cost controls and contingency planning as part of a six-point plan to improve the financial sustainability of the English game.
Its draft State of the Game report, which will undergo an eight-week public consultation before a final version is published, found nearly two-thirds of English Football League and National League clubs were "technically insolvent".
Many were increasingly dependent on cash injections from their owners to remain in business, the regulator said.
"This has led to a dangerous cocktail of rising debt and an over-reliance on owner funding, leaving clubs and their fans at risk," the IFR said in its report.
The regulator said clubs should manage financial risks more effectively and have contingency plans in place should owners withdraw their support.
"While some of our clubs are among the richest and most competitive in the world, others are standing on the edge of financial disaster," said IFR Chair David Kogan.
"A significant number of clubs have told us they would not survive if their owners walked away. This lack of resilience can no longer be ignored."
PREMIER LEAGUE BACKS REPORT
The Premier League said it agreed with the report's preference for a "football-led solution to revenue distribution."
"As the report makes clear, new funding must go hand in hand with effective financial controls and wider reforms to strengthen clubs," the league said in a statement.
The Premier League is negotiating a new revenue-sharing deal with the English Football League, which organises the three divisions immediately below the top flight.
Media reports said that Premier League clubs have offered to provide £1.8 billion ($2.38 billion) over 10 years, in addition to existing funding, but the EFL has asked for £1 billion over five years.
"We believe the proposal we have made to the EFL, which was unanimously approved by Premier League clubs in July, meets the objectives the IFR has set out in its report," the Premier League added.
"The league remains committed to concluding a long-term partnership with the EFL that is fair, generous and balances the interests of all clubs."
($1 = 0.7551 pounds)