Financial Implications of Relegation

In his weekly column in the Hereford Times, Graham Turner has been spelling out the implications of relegation to League Two.

Wary of the credit crunch, the Hereford United manager has already announced a cut in season ticket prices but he admits there may be other areas where income might drop.

"We have to take into consideration, with the recession on, the number of companies that are struggling or indeed have gone out of business totally," said Turner.

"Companies may be reluctant to take out sponsorship, advertising boards or programme adverts and therefore the prices have been looked at closely.

"Again, where we feel the need to reduce costs to businesses, that will also be put in place.

"There have been moves by the Football League to introduce salary-capping throughout all three divisions. But that so far has not materialised.

"However, in League 2 there is a salary cap for playing squads of 55% of turnover.

"So in the next week or so, we shall be sitting down to assess our budget for next season.

"Our estimated turnover will have to take into account the loss of some central funding, although that will not be massively substantial. In terms of the central funding that goes to League clubs, 80% goes to Championship clubs, 12% goes to League 1 clubs and 8% goes to League 2 clubs.

"Overall there will be a reduction in our turnover and so we will have to assess closely the number of players that we can bring in to fill the squad and how much we can afford to pay them."

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