York City are rubbing shoulders with the likes of Manchester United, Arsenal and Chelsea as one of the most profitable clubs in the country.

The Deloitte and Touche Annual Review of Football finance published today revealed City joined a host of more illustrious Premier League clubs who made pre-tax profits greater than £1million.

As reported in the Evening Press in December last year, the Minstermen made a record profit of £1, 274, 202 for the year ending June 1999 when the club was in Division Two.

According to today's report, City are just one of a handful of Football League clubs to break through the £1million barrier.

However, the profits of City, Torquay, Oxford, Bury, Bristol Rovers, Crewe and Sunderland - since promoted to the Premiership - pale into insignificance compared to the highest pre-tax profit makers.

As expected, Manchester United (£22.4m) top the list, followed by Aston Villa (£20.2m), Nottingham Forest (£8m) and Derby (£6.7m)

City were only able to make a record profit thanks largely to the six-figure sales of Richard Cresswell, to Sheffield Wednesday, and Graeme Murty, to Reading, plus cash recouped from Jonathan Greening's continuing appearances at Manchester United and sell-on money received from Dean Kiely's move from Bury to Charlton - all of which offset a trading loss of nearly £500,000.

Only five Football League clubs reported operating profits according to today's figures: Sunderland and Bradford, also now in the Premiership, and Gillingham, Walsall and Preston.

Club's like York City, who invest heavily in youth then sell to survive, are praised in the annual review for their long term planning and financial acumen.

It states: "Losses caused chasing success are fine in the short term if the gamble succeeds or the benefactor picks up the tab and if, having succeeded, the rewards of elevated status are used to repair the club's financial position.

"If not the risk is in damaging a club for a number of years. That can, and often does, generate instability at all levels within a club.

"English professional clubs are limited companies and that brings responsibility to the directors. In the past, some clubs have sat back, taken their fans for granted, acted weakly when faced with demands from players and their agents and have been cushioned by central handouts."

City chairman Douglas Craig was criticised for claiming at last December's meeting of shareholders that "York City will never be a Premier League club".

Craig, who has insisted the First Division remains City's holy grail, added: "That is nothing to do with a lack of ambition, that is reality."

With the recently agreed broadcasting rights deal set to bring £2.4 billion into the game over the next four years, such heavy doses of realism should be matched by other smaller clubs, according to Gerry Boon, head of the Deloitte &Touche Football Industry Team.

The new TV money will provide a shot in the arm for football and could mean promotion to the Premiership doubling revenue for promoted clubs to £25 million in 2002/03.

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But Boon reasons smaller clubs should use the extra cash to stabilise their positions rather than over-extend themselves in chasing a place in the increasingly cash-laden Premiership.

"The new TV deals paradoxically presents many clubs with a predicament. Can the clubs hold onto the windfall or will it trickle through their fingers into the bank accounts of overseas clubs or the pockets of the players?" asks Boon.

"In 1998/99 only 23 per cent of Football League clubs were profitable. Will the new deals relieve the pressure on them to sell their best players?

"Will they result in more Football League clubs being profitable? Or will the extra money be spent on the pursuit of Premier League or other glory?

"The new TV and Internet deals offer Football League clubs a once-in-a-lifetime opportunity to stabilise their financial condition - to create a football business model that can demonstrate break-even or, dare we hope for it, profitability on a sustainable basis."

And backing the earlier words of Craig, Boon added: "It will no longer then be quite such a desperate struggle to climb out of Division One and remaining there might realistically, and sensibly for many, represent the pinnacle of ambition for a large number of clubs.

"We just hope that this opportunity is taken - we fear it will not be."

Other points highlighted by the report:

In the 1998/99 season, the 92 professional football clubs generated turnover of £951 million, up ten per cent from £863 million.

Transfer payments rose to an unprecedented £316.9 million - of which £142.2 million went overseas.

Significantly for clubs like York City, the trickle down to the Football League was back up from £1.5million in 1997/98 to £27.5 million.

Total wages increased 18 per cent against a 10 per cent turnover increase, but were up only 3 per cent overall in the Football league

Premier League players' wages were estimated at £241million for 1998/99 - an increase of 266 per cent since 1993-94.

More than 25million watched Premier and Football League matches in 1998-99 - higher than at any other time in over two decades although figures for the 1999/2000 season show a slight fall.

l Division Two recorded more than 4million people through the turnstiles for the first time since 1976/77 and Division Three broke the 2million spectator threshold for the first time since 1979-80.

Average stadium occupancy was 91 per cent in the Premiership, 66 per cent in Division One, 53 per cent Division Two, 36 per cent Division Three.

York City reserves are in action tonight when they start their Avon Insurance League campaign against Walsall at Bootham Crescent, kick-off 7pm.

City: Howarth, Dawson, Hall, Jones, Hocking, Reed, Thompson, Bullock, Alcide, McNiven, Wood, Turley, Collinson, M Williams, Gowen, Fielding.

dave.stanford@ycp.co.uk