By David Gold
April 15 – Carling Cup winners Birmingham City could be denied entry to the Europa League next season due to concerns over the club’s finances.
Last season, FA Cup runners up Portsmouth were told that they would not have been allowed to participate in Europe had they beaten Chelsea in the final of that competition.
The decision was made by the Football Association and Premier League, who are delegated the authority from UEFA to judge whether their teams meet the financial criteria required to possess a UEFA license and compete in European competition.
In February, Birmingham, who would qualify for the Europa League after their 2-1 win over Arsenal in the Carling Cup final, revealed that they had losses of £27 million ($44 million), though £6.7 million ($10.9 million) has reportedly been raised by owner Carson Yeung since then.
But that still leaves a significant shortfall which the club needs to address.
The money raised by Yeung was from property which he put up as collateral for a multi-million pound loan, which he did in order to ensure that the club could continue “without significant curtailment of its operation”.
The Premier League outfit’s acting chairman Peter Pannu has dismissed concerns in the past about the club’s financial wellbeing, telling the club’s website last month that the club were “in credit” and had no “financial impediment”.
“The finances of the club in terms of profit and loss are fine and with the continued support of Carson Yeung we do not envisage any foreseeable problems,” he said.
“It is routine procedure for the Premier League and Uefa to look at the club’s books, especially as we are now eligible for European competition.”
Despite Pannu’s confidence, Portsmouth echoed similar words of assurance before they experienced serious financial difficulties, and so the FA and Premier League are likely to be fearful of a recurrence of that particular catastrophe.
A decision is to be made next month, it is understood, and should they have a concern about Birmingham’s ability to continue as a going concern, a number of sanctions are available, including a potential transfer embargo, a ban on renewing or signing new contracts or the enforced sale of players.
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