SWANSEA CITY have welcomed a timely report warning that many league clubs could fold unless they put football's finances back on a firm foundation.

"Without proper management the future of some clubs - especially those desperately investing to try and get promotion - could become unsustainable," said top accountant Gerry Boon.

"The challenge for clubs will be to manage their money sensibly and en-sure that some of it goes on strengthening business infrastructure rather than straight into the players' pockets," he said.

For while turnover in the professional game rose by an average 10 per cent over the past year, players saw their pay packets bulge by an extra 18 per cent.

"Wages in the lower divisions are far too high for long-term financial strength and survival ... and may cripple clubs with commitments to expensive players," warned Boon.

Mike Lewis, Swansea's general manager, said the report, coinciding with his own club's moves to stabilise its financial position was "spot on." Last season's Third Division champions have floated an alternative investment market to offset debts of £4.5m.

And the 30-man playing squad is to be slashed by almost a third.

"Spiralling wages have occurred only because football has allowed it to happen," said Lewis.

"You cannot point a finger elsewhere. Not many people outside football had 18 per cent pay rises last year. I imagine 1.8 per cent was nearer the mark, in line with inflation.

"Debts of £4.5m are alarming if you don't do anything about it.

"We have put measures into place to deal with the situation. Nine million new 50p shares are being issued.

" The flotation is aimed at making the club more fluid financially, reduce losses, attract shareholders to the new holding company and become viable."

Lewis said the size of the squad would have to be reduced to a manageable 22 or 23 players.

"That doesn't mean there is no money available for a new striker. Manager John Hollins has been empowered to bring in the man he needs.

"Last season we invested in success to a degree by keeping a large squad and it paid off handsomely.

"We will continue with a 14-strong promotions team and three in the commercial department to generate extra income and get closer to corporate organisations which has been one of our weaknesses.

Swansea City manager John Hollins has told his players to maintain their discipline if they want to make their mark on the Second Division.

Hollins was full of praise for his players after their disciplined approach to last Saturday's opener against Wigan.

In a goalless encounter that flared up on more than one occasion before Wigan's Kevin Nicholls was eventually sent off for a butt on defender Steve Jones, Hollins was delighted that his own players kept their heads.

"I don't mind the physical side of the game, but I don't want my players with red cards," explained Hollins.

"Both teams were committed to the cause and, while we didn't lie down, I thought we kept our discipline well.

"Overall I didn't think it was a dirty game, but whenever there were incidents the Wigan players tended to grab people by the throat. I don't like that."

Hollins also revealed that it was the fear of a red card which prompted him to take Martin Thomas off 20 minutes from time after the no-nonsense midfielder picked up a booking for a foul on Simon Howarth.

"Sometimes you have to take a player off if he is on a yellow card and replace him with a fresh one," added the Swansea boss. "That's why I took Tommo (Martin Thomas) off."

Swansea defender Matthew Bound confirmed that passions were running high in front of a near-capacity crowd.

"Both teams were fired up for it," said Bound. "We both wanted to get off to a winning start.

"I think the passions got overheated a bit and he definitely head-butted Steve Jones. Luckily the linesman saw it and he had to go. He had no option but to send him off."

Hollins was happy with Swansea's disciplinary record in the League last season with just two red cards for Martin Thomas and Walter Boyd.

Thomas topped the yellow card list along with Jason Smith — both players being booked nine times out of a season's total of 62.

Swansea City shareholders agreed to the club's October flotation on the alternative investment market last night in a bid to raise up to £4.5m from the issue of £9,000,000 shares at 50p.

SWANSEA CITY suffered losses of £1.2m last season when they were Division Three champions and are currently £4.5m in debt, shareholders were told at last night's annual meeting.

To cover losses, the club had to borrow £1.2m from its parent company, Ninth Floor plc.

Shareholders agreed to the Swans floating an alternative investment market with the intention of raising £4.5m from the issue of nine million new 50p shares.

A new holding company, Swansea City Football Club plc will be incorporated which will include all rights and interests to the new Morfa Stadium project.

"Because of the substantial deficit on the club's profit and loss account and substantial loans outstanding to Ninth Floor plc it is necessary to reorganise the capital of the club," said Swansea chairman Steve Hamer.

"We have now built a solid foundation for the future and I am looking forward to the new challenges in Division Two and the eventual move to the new stadium."

During the year from May 1999 to May 2000, the club borrowed £1.2m from Ninth Floor to offset similar amount losses, shareholders were told. This put the club £4.5m in the red because the profit and loss account showed a deficit of £3.3m up to May last year.

"Ninth Floor plc is already listed and what we are doing now is creating another listing for a new company, Swansea City FC plc," said club spokesman Martin Burgess.

"The existing shares of the football club will be converted into plc shares

"Swansea City FC, owes Ninth Floor £4.5m which it is converting to nine million shares at 50p."

Wigan boss Bruce Rioch is tipping Swansea City to have a good season in Division Two after locking horns with his old pal John Hollins in Saturday's season opener at Vetch Field.

The former Derby County, Aston Villa and Scotland interational midfielder was speaking after the 0-0 draw between Swansea and the division's 9-4 favourites.

"I think Swansea will do well this season," said ex-Arsenal and Norwich City boss Rioch.

"I spoke to the manager of Cheltenham Town Steve Cotterill last season when they played us in the Worthington Cup at the beginning of the season because he was concerned about how his team would do in the Third Division.

"After the match I told him his team would do well, and I think the same applies with Swansea this season.

"I came here when I was Norwich boss in the Worthington Cup and Swansea gave us two tough games. It is a difficult place to come and get a result, so I knew how tough it would be coming here on the opening game of the season.

"I picked a side with experience of playing in an opening game."

Swansea boss Hollins and Rioch are good friends from their playing days and during the early stages of their managerial careers.

"I know John well from our days at Queens Park Rangers together," said Rioch.

Hollins said: "We are in the Second Division and every game is a challenge.

"I'm a Second Division manager and I like it. I don't want to go back down again."

Hollins, meanwhile, is still hoping that Jamaican striker Walter Boyd will be back in action for the trip to Brentford on Saturday.

Boyd failed to make the Wigan game after a freak accident at home left him with a dozen stitches in his foot.

Meantime, Swansea City shareholders will be told tonight that the Vetch Field club has received more than £4.5m from its parent company Ninth Floor Plc.

The announcement will come at the AGM where the club will start the ball rolling to float Swansea City on the Alternative Investment Market.

The visit of the Second Division title favourites to Vetch Field was always going to be a good yardstick to Swansea City's standing in their new found life outside the basement.

The signs were generally encouraging. Solid at the back and competent in midfield, Swansea never looked out of place against their wealthy opponents. In fact they looked the better side.

But it was Swansea's long-standing problem in front of goal that raised its ugly head again.

Having dominated the entire second-half following the dismissal of Wigan's Kevin Nicholls on the stroke of half-time, Swansea failed to make their wealth of possession count as they hit countless brick walls in their pursuit of Roy Carroll's goal.

"Overall I was pleased with the way we performed," declared Hollins. "If they are the best team in the Second Division then I'm quite happy.

"The disappointing thing from our point of view was the fact that we failed to break them down.

"The game was destined to go 0-0 after the sending off because all Wigan wanted to do was lock out the point by putting a brick wall in front of us.

"It was up to us to break them down. But we just didn't do enough on the outside or down the middle to do that apart from one Jason Price chance.

"I know I need another striker, but although there are quite a few of them out there, I have yet to find one that I believe would fit in here.

"We have built up a superb team spirit at this club and you have to be careful when you interrupt that balance."

But Hollins was quick to point to the positives that came out of the opening day of the season.

Swansea's defence, as usual, remained solid throughout and restricted Wigan to just two serious opportunities throughout an often fiery encounter watched by a bumper crowd of 8,391.

Swansea even had the edge when Wigan nearly caught them on the counter-attack 10 minutes from the interval, Neil Redfearn unleashing a fierce drive from the edge of the area. But Roger Freestone highlighted the point that he didn't intend to relinquish his Wales claim with a tremendous save to tip the midfielder's effort over the bar.

Apart from that Freestone had little to do as he watched Wigan back-pedalling until the 83rd minute when Bruce Rioch's side nearly made Swansea pay for their lack of creativity in the final third.

With Swansea probing for the opening, Scott Green got in behind Jonathan Coates to pull a pass from Roberto Martinez back to the unmarked Andy Liddell 10 yards out. But with the goal gaping, Liddell blazed a glorious effort over the bar.

There had only looked one winner up until that point after Wigan had set out their defensive stall following the sending- off of Nicholls on the stroke of half-time.

Both sides were clearly up for their opening day encounter as fighting broke out on more than one occasion with Wigan deemed the main instigators after Darren Sheridan and Lee Ashcroft were shown yellow cards for their troubles.

Wigan certainly hadn't learnt their lesson when Nicholls saw red seconds before the interval after head-butting defender Steve Jones while the two players lay entangled on the floor.

If referee Dermot Gallagher missed it as another scuffle ensued, the linesman was right on the spot to use his new, increased powers to full effect.

It changed the game in Swansea's favour as they laid siege towards the Wigan goal straight from the restart. Swansea passed the ball well, determined to remain patient even if the crowd became restless at times.

Steve Watkin held the ball up and played people in well, while makeshift striker Nick Cusack worked hard as injured Walter Boyd's deputy. But their main outlet remained Jason Price down the right as Coates found it difficult to push forward on the opposite flank.

But while Swansea huffed and puffed trying to get in behind the Wigan defence, Price found himself with the best opportunity of finally breaking the deadlock in the 59th minute.

Watkin and Cusack combined to rob captain Carl Bradshaw midway inside the Wigan half and play in Price on the right. But as the Welsh Under-21 international broke into the area, his chip sailed just over Carroll and the cross bar when he should have done better.

Substitute Tommy Mutton put in two good crosses which just eluded Watkin, but by that time everyone had resigned themselves to a point.

"I'm disappointed for the crowd that we didn't give them all three points," added Hollins.

"But there are Second Division teams out there who didn't even get a point from their opening game.

"I can still remember the opening game at York last season when we lost 1-0. I remember there were about 50 fans outside wanting to know why we didn't win. At least we've got a point to start this time."

But with more firepower, Swansea could have had all three.

Within 24 hours of his substitute appearance against Wigan, Tommy Mutton further pushed his claims for a first team start by grabbing a hat-trick in yesterday afternoon's friendly fixture with Llanelli.

The Swansea striker's goals helped his side to a convincing victory at a rain-soaked Stebonheath Park.

Despite becoming over-run towards the end, it was Llanelli who made the better start, taking the lead when Mark Parfitt headed a free-kick home from close range.

The equaliser, another header, came on 20 minutes. This time it was Stuart Roberts' cross from the right that Kristian James directed past home ‘keeper Pat O'Hagan. The right-hand side was where Swansea were having most success and it was no surprise that their second goal should be created there.

Bari Morgan released Roberts into space and, when his cross was cleared to the edge of the area, Mutton drove into the net.

The same three players combined to stretch the lead further on 59 minutes. Roberts picked up the pace in the final third before Mutton crossed for Morgan to head in.

Mutton's second saw him race clear of the defence, round the advancing 'keeper and slip the ball into the net. That was on 63 minutes and two minutes later a superb volley from Morgan left the ball wedged in the stanchion of the goal as Swansea's goal count advanced to five.

The goal of the match came with 20 minutes remaining. On the edge of the area Mutton chipped the ball up for himself then beat the helpless goalkeeper with a lobbed shot that dropped perfectly into the net.

Llanelli: O'Hagan, Hill, Jones, Graham, Davies (G), Parfitt, Palmer, Phillips, Davies (J), Watkins, Dickerson; Subs: Harrison (for Phillips, 45), Evans (for Harrison 55), Kelly (for Watkins 67), Hughes, Rees