English football has amassed debts of around $5.2 billion at all levels of the game and a top club could fold in the current financial climate, English Football Association chairman David Triesman has said.
|Triesman fears for the spiralling debt [GALLO/GETTY]
Triesman told a conference of football business leaders that the figure was based on information supplied by sources in the City of London and was the most reliable and up-to-date estimate available.
"The best estimate I could get in the City yesterday was that debts in English football as a whole have probably edged to the $5.21 billion mark," he said in the opening keynote speech at the two-day conference at Chelsea's Stamford Bridge ground.
"There is one thing certain about debt and that is that it has to be repaid, alternatively it has to be refinanced.
"The debt mountain as we now know is owned around the world and therefore part of the value of the club is owned around the world, either by financial institutions some of which are in terrible health, sometimes by very wealthy owners who are not bound to stay in the club and sometimes by not very wealthy owners who are also not bound to stay with their club.
"As we all know today and far too painfully, financial institutions become ever more risk averse."
Triesman said nearly a third of the overall debt was owed by England's top four clubs, Manchester United, Liverpool, Chelsea and Arsenal, and that on average the wage bills were climbing by as much as 12 percent a year.
The FA itself had accrued $695 million of debt following the construction of the new Wembley Stadium which opened last year, a figure included in his overall estimate.
Asked whether he could guarantee that a top English club would not succumb to debt and fold during the global financial crisis, Triesman told a news conference: "I don't know – it could.
"If somebody had said to me a month ago did I have a genuine fear that Lehman Brothers would go bust I'd say no I didn't.
"What I know is we are in very much more volatile position in which debt is not only a problem in terms of its volume, it's a problem because those who own the debt are themselves now often in serious problems.
"Your fate isn't in your own hands."
| Bjorgolfur Gudmundsson is facing a serious financial crisis in his own country [GALLO/GETTY]
Triesman would not be drawn on the reported troubles of West Ham United, whose owner is Icelandic banker Bjorgolfur Gudmundsson.
The Icelandic government was forced to present an emergency bill to parliament on Monday giving it sweeping powers over the nation's banks to save the country from financial ruin.
"I cannot comment about West Ham," he said.
He also said the ownership of clubs was no longer as transparent as it should be with owners moving the debt on through the financial markets.
"The owners break the debt up as a matter of policy into small packages.
"They mix it with other debts, some of it fine some of it toxic, and sell it on," Triesman told the conference.
"I believe this poses us with a tangible danger, not only is debt at high risk levels, but also in a period where transparency lies in an unmarked grave.
"There is no point in thinking that this affects everybody in the world except football.
"Indeed, further down the pyramid of football more and more clubs are in trouble and a number of owners leave abruptly and either seek repayment of debt owing to them as directors or they can consider selling the ground."
Triesman, a former foreign office minister, also said the test for determining who could own an English football club known as the "Fit and Proper Persons Test" should be more rigorous.
"We can't have a test where someone like Robert Mugabe can own a club because he has not been convicted of anything and someone like Nelson Mandela couldn't," he said.