In its 12th annual financial review of Scottish football, it said the ten Scottish Premier League (SPL) clubs moved to new levels of debt, reporting losses which were £15m ($21.7m/B24m) more than in the 1998/1999 season.
“Clearly, the game in Scotland faces a number of financial difficulties which the clubs are aware of and that they are trying to tackle,” said David Glen, the author of the report. “One major challenge is the decline of attendance figures for SPL matches. While season ticket sales are increasing overall, stadium occupancy rates at matches are falling, with rising gate prices and the glut of televised matches two of the probable reasons why irregular attendees are staying away in greater numbers.”
The report also warned that the situation could get significantly worse for the SPL if Rangers and Celtic defect to the English Premier League. “Looking at the SPL in overview, the financial dominance of Rangers and Celtic remains clear, with over 70 percent of total turnover being attributable to them. In wages terms, they dwarf the other clubs, with Rangers paying out £34m ($49m/B54m) and Celtic £20m ($29m/B32m) out of a league total of £85.5m ($124m/B137m).
Roger Mitchell, chief executive of the SPL, made a statement last night suggesting that responsibility for the member clubs’ poor financial performances lay at their own doors.
"Over a year ago, the SPL put forward detailed proposals to restrict the numbers of senior players at each club [the French model] as well as introducing a squad wages cap [total squad wages as a percentage of turnover] to further limit costs," said Mitchell.
"Neither of these achieved the 11-1 majority required by our constitution. There was a view from some that the market will itself arrive at the same conclusion shortly, making central regulation superfluous."
The report confirms that the lack of wage caps has heavily contributed to the SPL’s financial demise. “The Bosman ruling has had a significant impact on clubs trying to hold on to good players, as the need to negotiate an extension earlier in a player’s contract allows the player to demand increased terms well before the current contract expires… We do see clubs making efforts to break this vicious circle, but it will take time to achieve this and one has to ask if it will be too late for some. Football clubs have defied the basic premise that businesses cannot survive long-term losses, but if one should succumb, others are likely to follow.
