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GERRY COX: MONEY, MONEY, MONEY - IT'S A RICH MAN'S WORLD

5:00pm Thursday, 28th January 2010

I seem to have spent more time recently talking to people in football about financial matters rather than the game itself, and that is a worrying trend. In the past week or so, I have interviewed Gianfranco Zola (manager of club in trouble) Peter Storrie (chief executive of club in trouble) and Ron Noades (former and would-be owner of club in trouble).

I have also spoken to players who wonder when they will next be paid, agents who wonder where their next deal is coming from, and prominent figures in the game who wonder where it will all lead. Will we reach financial meltdown or a new dawn, where the people who run football clubs manage to remember their business principles when entering the boardroom?

It is clear that for far too long, too many people running football clubs are like modern-day Micawbers, believing that 'something will turn up' rather than work with a proper budget that balances the books. As the Dickens character famously says: 'Annual income twenty pounds, annual expenditure nineteen pounds nineteen and six - result happiness. Annual income twenty pounds, annual expenditure twenty pounds ought and six - result misery.'

Yet that lesson, the fundamental principle of business, has failed to sink in, time and time again. Money has been spent when there is little or no prospect of any realistic return, loans taken out against uncertain future earnings, too many clubs running with a wages to turnover ratio that is simply not sustainable.

Yes, of course sometimes you need to speculate to accumulate, and it can be argued that prudent financial housekeeping can only take you so far. Controlled risk-taking can lead to rewards in many walks of life, and rarely as spectacularly as in football, where you can buy success to some extent, as Roman Abramovich has shown at Chelsea and Sheikh Mansour hopes to do at Manchester City.

But remember that Manchester United and Arsenal, and past teams of Liverpool and Tottenham, became England's leading clubs without breaking the bank. They were run on tight financial lines (apart from Tottenham's near-disaster in the early 90s when they broke another golden rule of business - don't stray too far from your core business. Expanding into leisurewear and ticketing almost brought the club to its knees, but back in 1991 the banks would never foreclose on a football club.)

Sadly that may not be the case now, and if it is not the banks pushing clubs over the precipice it is HM Revenue and Customs. Another golden rule of business - pay your taxes on time (or get a good accountant). Don't let the debt accrue. So many clubs live from month to month, dreading each coming VAT quarter payment, robbing Peter to pay Paul.

I know what it is like, because like many small business-owners, I have had to make redundancies, slash expenses, cut back on all but the most essential outgoings and re-structure repayments to ease cash flow. It is not nice, but necessary to ensure we continue to trade through difficult times. Most businesses are going through a similar situation, and so are many football clubs. But you get the feeling that too many are not being prudent enough, or are trying to close the stable door long after the horses have gone.

Until we see a real appetite for financial restraint, and more misers than Micawbers in our boardrooms, there will be more misery to come.

Gerry Cox is one of England's leading football writers and former Chairman of the Football Writers' Association. He has covered well over 1000 matches including four World Cups and four European Championships. He currently runs the Hayters Sports reporting agency and writes for the Daily and Sunday Telegraph.

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