Burnley must meet 'financial shock' test under new independent regulator
Burnley will have to prove they’re able to withstand “major financial shocks” under new laws brought in by the Independent Football Regulator (IFR).
Clubs will have to demonstrate they’re able to deal with unexpected financial issues, such as relegation or the withdrawal of owner’s funding, without relying on unpredictable factors such as player trading.
That could be an issue for the Clarets, who have had to wheel and deal and sell some of their biggest assets – such as Nick Pope, Nathan Collins, Dwight McNeil, Maxwel Cornet, Sander Berge and Wilson Odobert – in recent years after being demoted to the Championship.
It comes as the club look set to suffer their third straight relegation from the Premier League, sitting 19th in the table and nine points adrift with only eight games remaining.
Richard Monks, chief executive of the IFR, said: “It cannot be right that so many clubs exist on a cliff edge where one change could threaten their entire existence.
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“Fans should be debating formations not finances. Our licensing regime will ensure that club risk is managed appropriately, creating a more stable environment for growth and investment.
“The IFR will work with clubs and support them to meet the licensing requirements, which are absolutely essential to our mission to change English football for good.”
As part of the plans, Burnley and the other 115 regulated clubs will have to demonstrate that they hold “appropriate financial resources” before they are given a full licence.
The risk levels will be assessed on a case-by-case basis, the IFR have indicated, with higher risk met with greater requirements to satisfy.
If clubs are believed to be at risk of not meeting the necessary requirements, they may be required to reduce their expenditure or restructure outstanding debt.
Perhaps crucially, players will not be counted as liquid assets, with the belief that they cannot be easily cashed in at any time because of the transfer window system in place in this country.
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