Fayed's Fulham nets record £33m loss

Mohamed Al-Fayed, the chairman of Fulham, yesterday warned that football was "in danger of going broke" as the struggling Premiership club reported record losses.

Fulham recorded a deficit of £33.6m for the year ended 30 June, which incorporated their first season back in the top flight. Turnover increased from £10m to £32.7m after winning the First Division in 2001, while operating costs were cut from £16.8m to £7.7m. But despite the Harrod's owner's millions, the club continued to lose money.

Some of the loss was due to transfer fees, with £37.5m spent on signing top stars such as Edwin van der Sar and Steve Marlet in readiness for life in the Premiership. But Mr Fayed said the spending could not continue.

He said: "The days of profligate spending are now over and we subsequently must tighten our belts and introduce a regime of prudent budgetary control from top to bottom; transfer fees, player salaries and stadium development will all be scrutinised – make no mistake, football is in danger of going broke if it continues to pay itself more than it earns and we must address the situation immediately if we are to survive in the top flight of English football.

"The season 2001-02 was to be an historic year for our club. We consolidated our place in the Premier League, finishing in 13th position, and reached the semi-finals of the FA Cup for the first time in 27 years.

"This moderate success on the field came at an exorbitant cost to the club and necessitated a huge additional capital investment."

Fulham's Premiership status is not yet secure with the club four points above the relegation zone with two games of the season remaining.

Changes have already begun at the club with a new manager due in the summer, after the recent departure of Jean Tigana. Fulham have been sharing a ground with QPR as problems surrounding the redevelopment of Craven Cottage continue.