HONG KONG, July 30, 2011 (AFP) - The head of the Premier League says it is "inevitable" football clubs will get into financial trouble, after a British parliamentary report demanded changes to the way the game is run.
The report by an influential committee of lawmakers said clubs "spend up to the hilt" to get into the Premier League and remain there, while insolvency rules encouraged "excessive financial risk-taking".
Richard Scudamore, the Premier League chief executive, conceded changes were needed to make sure teams are run responsibly, but said there was only so much administrators could do to keep clubs onside financially.
"It is inevitable that football clubs will get into financial difficulties," Scudamore said in Hong Kong on Saturday, ahead of the final of the Barclays Asia Trophy.
"It is a stretch business, where people will stretch to try to achieve something beyond where they're at."
Friday's report included calls for a licensing system to stop clubs from falling into financial trouble and improvement of the way owners are vetted.
Worries about clubs struggling with debt came to a head in February 2010 when Portsmouth became the first Premier League team in history to go into administration.
Hong Kong businessman Balram Chainrai eventually took over the club as he tried to call in loans he had made to previous owners.
"The Portsmouth situation was unacceptable," Scudamore admitted. The multiple turnover of owners, and finding out who was ultimately backing them as investors, was too tangled a process.
The "fit and proper" test that owners must pass has evolved significantly since it was introduced in 2004, partly as a result of that experience.
"We have a much stiffer test and a much stiffer set of hurdles that you have to overcome in order to become an owner of a football club," Scudamore said.
"All those rules are being enhanced and evolved in order to avoid a repeat of the Portsmouth situation."
But another ownership saga developed at Birmingham City, which was taken over when it was in the Premier League by Hong Kong businessman and former hairdresser Carson Yeung.
Yeung has subsequently been arrested and charged with money laundering in Hong Kong, after the club's relegation at the end of last season.
The Premier League would be on "very dangerous grounds" as a sports organisation if it disqualified potential owners on rumours or unproven charges, Scudamore said.
"We don't sit in the Premier League offices deciding Carson Yeung is guilty of X, Y and Z when the authorities haven't arrested him or charged him or found him guilty of anything," Scudamore said.
"That has all come out subsequently. There's absolute nothing we could have done on the front end."