London: Only “rank bad management” would allow a Premier League club to go into administration such are the huge amounts of money coming in, the league’s chief executive Peter Scudamore said on Sunday.
Portsmouth are the latest club to suffer financial problems and are under a transfer embargo until they pay outstanding debts to other clubs but Scudamore said that Premier League rules prevented his organisation taking any further action.
“We can only go by our rule book,” Scudamore told BBC radio 5-Live. “The owners run the club and in fairness to the people running that club they are working extremely hard to live the dream and they are scrabbling hard to make sure this club stays alive.
“You can’t say it’s impossible to imagine a Premier League club going out of business when it is still in the Premier League but the reality is, given the amount of central income that is generated, it would be rank bad management if a Premier League club were to go into administration.
“Infrastructure-wise Portsmouth are in a difficult position but the clubs have assets -- the players -- so they have choices. They might not want to sell them because of their own aspirations but in the harshest scenario that’s the circle of life of a football club.”
Scudamore said it was not necessarily a bad thing for clubs to be in debt but said the league was taking a closer interest in their finances.
“Everybody needs to be in debt to achieve,” he said. “There are different types of debt and there are all sorts of reasons why debt per se isn’t bad.
“We changed our rules in September so now when we see the financial statistics come in at the end of March we can take a stronger role to make them sustainable.
“But we are never going to be intervening at a level where we decide how much money is needed to run the club.”
Scudamore said the outlook for the league was positive. “We’ve secured long-term contracts with TV companies, we’ve seen out the worst of the recession, attendances are up,” he said.
“The season has been fantastic and there are lots of positive things going on.”