Football's economic model is broken and many clubs are in danger of following banks and construction companies into oblivion, the Liberal Democrat Treasury spokesman, Vince Cable, has warned.
Cable, an economist and, according to a recent poll, the most trusted politician in the country, said Crystal Palace going into administration could spark a chain reaction.
"Football is a sector of the economy that simply hasn't faced up to the realities of the crisis, they've just gone on as if the world hasn't changed," said Cable. "It's a combination of extraordinary financing arrangements, and players who are paid absolutely ludicrous salaries which are clearly beyond the means of all but a handful of clubs to pay on a sustainable basis.
"If the FA and the clubs have any sense they will deal with this matter now, otherwise we are going to see a major upheaval as clubs discover they simply cannot function with very high leverage [essentially borrowings against future earnings]. Interest rates are currently low, but they will almost certainly rise, and a lot of this debt will not be payable."
Prime Minister Gordon Brown says debt levels in the game are too high, and suggests management of clubs "must look seriously at their responsibilities to their supporters".
Both were speaking after debt at Manchester United's parent company Red Football was revealed to have risen to £716.5m in the year to June 2009. Many United fans at Wednesday's Carling Cup semi-final against Manchester City protested against the club's American owners by wearing green and yellow scarves, the club's original colours.
Cable also called for the tax treatment of sport's governing bodies to change to reflect the contribution sport makes to the wider community.
"The clubs obviously have to pay VAT, there's no way round that, nor could you exempt big clubs from corporation tax; after all the Glazers investing in Man United is a corporate concern. But it is an issue with the sports federations, like the Rugby Football Union and the Rugby Football League, because they are umbrella organisations supporting the sport and promoting community sport, and for them to be paying corporation tax is much more questionable."Reuse content