YOUTH and heavy doses of realism continue to hold the key to York City's well-being and promotion hopes, according to Minstermen chairman Douglas Craig.

As reported on the front page of today's Evening Press, City are losing around £24,000 a week, but Craig believes City can make progress both on and off the field.

In his chairman's report, to be presented to the shareholders of Bootham Crescent Holdings on Thursday, December 20, Craig singles out First Division Crewe Alexandra as a source for inspiration.

He states: "It is essential that the club develop a young squad who can continue their progress after winning promotion to the Second Division.

"We do not wish to join those who buy short-term success, only to fall back into the Third Division.

"In the eight seasons since the club was last promoted to the Second Division, almost a third of those clubs promoted have dropped back into the lower division within one or two seasons.

"The clubs able to prosper after leaving the Third Division have been those with rich benefactors or those who have shrewdly built around youth, like Crewe Alexandra.

"While this second route is slower and requires the patience of supporters, it is the only realistic option for the club and that is why we continue to invest in developing our trainees and in our excellent training facilities."

Ironically City's last promotion was achieved at the expense of Crewe, beating the Railwaymen on penalties at Wembley in 1993.

With the club today announcing record losses for the year ending June 2001 of £1,261, 038, Craig stressed the other reason City must invest in youth is because of its reliance on transfer fee income.

"The expenditure incurred by the club is not covered by income from normal trading activities," he said.

"It relies heavily on income earned from the sale of players developed by the club, an activity that has delivered more than satisfactory results in recent years.

"This income was hampered during the season under review by doubts cast by European bureaucrats who sought to dismantle the football transfer system that offers the only means by which many clubs keep their head above water.

"Though these bureaucrats have been unsuccessful - for the time being - few clubs were willing to pay transfer fees, particularly for players from the lower divisions, until the situation was clarified."

In his report, Craig admits last season's results were "disappointing". However, he maintains the club under manager Terry Dolan has made "considerable progress in rebuilding a squad capable of bringing long term success".

Updated: 13:15 Saturday, November 24, 2001