Midland football clubs are reining in their spending plans with new financial ‘fair play’ regulations around the corner.

But with the Premier League season kicking off, pressure is mounting on benefactors to plug funding gaps and keep clubs competitive on the pitch, while owner exits can be expected outside the top division during the next two seasons.

UEFA’s fair play initiative comes into effect this year, with the Premier League ruling that the wage bill at clubs like Aston Villa and West Bromwich Albion must not exceed £60 million by 2016 while losses will have to be restricted to £105 million over a three-year cycle.

However, Ian Gould, business restructuring partner and football expert at BDO in the Midlands, said clubs in the region were well-placed to cope with the new rules.

West Bromwich Albion are perennially profit-making, and, after a period where rising wages have pushed losses up at Aston Villa, the club has shown evidence of getting to grips with them.

Mr Gould was speaking after a new report, A New Dawn for Fair Play?, saw 66 finance directors from all English professional divisions surveyed.

It revealed that 85 per cent of clubs expect to comply with financial fair play (FFP) rules in 2013/14 without any significant changes to their business models.

However, FFP compliance is still the third most pressing concern for Premier League and Championship clubs, with 83 per cent planning to spend less or the same on payroll costs this season.

In addition, only 12 per cent of clubs expect to increase their transfer budgets with almost half of clubs in the Premier League and Championship – 44 per cent and 41 per cent respectively – saying FFP is a key driver in this decision.

Mr Gould said: “The divisions below the Premier League are crying out for a sustainable business model. Football clubs play a vital role in the Midlands and in local communities, so there is a clear need for greater financial stability and a higher proportion of clubs living within their means.”

With the Premier League season starting this week, both of the local teams taking part have shown stronger balance sheets in recent years.

While revenue dipped for Aston Villa last year, from £92 million to £80.4 million, a reduced wage bill meant overall losses fell from £53.9 million in 2010-11 to £17.7 million last season.West Bromwich Albion increased its wage bill, and saw profits fall from £9.1 million to £1.5 million, after turning over £66.7 million. Championship Birmingham City made a profit of £15.7 million in the 2011-12 financial year, based on player sales. The club saw revenue dip from £61.5 million in its last season in the Premier League to £39.1 million after it was relegated.

In its latest accounts, League One club Wolves made a profit of £9.4 million on £60.8 million turnover despite being relegated that season.

Fellow League One side Walsall is one of the country’s most profitable sides, and accounts filed with Companies House show it posted a profit of £10,000 despite turnover dipping from £5.4 million to £5 million in the year to May 31, 2012.

The survey reveals that only 30 per cent of finance directors describe their club finances as ‘very healthy’ – although there are marked differences between the divisions. Premier League finance directors are the most positive, with 83 per cent describing their financial position as ‘very healthy’ but only 14 per cent of their counterparts in League One were as confident.

The survey also reports a growing reliance on benefactors to plug funding gaps at clubs. In total, 65 per cent of clubs acknowledged a dependence on principal shareholders to finance operating losses compared with 58 per cent last year. For the Championship the figure is 94 per cent and for League One it is 64 per cent.

Faced with the challenge of plugging a funding gap while also keeping the club competitive on the pitch, it is perhaps not surprising that 28 per cent of Championship club owners and 36 per cent of League One club owners are considering a full or partial exit in the next 12 to 18 months.

At the same time, a similar proportion of clubs, 33 per cent and 21 per cent respectively, have been approached by potential new external investors in the past year.

Mr Gould added: “The pot of gold that the Premier League, which attracts substantial commercial income, is perceived to represent means there is intense competition for a limited number of promotion places.

“This creates a temptation for Championship and League One clubs to overspend and push themselves into the red, leading to a dependency on principal shareholders bankrolling trading shortfalls. 

“In this context, we now see around a third of existing owners seeking a full or partial exit.

“Football clubs continue to attract huge interest and publicity but, when it comes to the crunch, only a limited number of potential investors have the resources and the appetite to bankroll the cost of their club’s ambitions.”