CHESTER City FC faces a critical season as it strives both to balance the books and perform well on the pitch, club owner Terry Smith said last night.
Speaking after Football League clubs reported huge operating losses for 1999-2000, Mr Smith said the non-League club must explore every option available if it was to buck the nationwide trend of shrinking revenues.
An annual survey yesterday revealed that Football League clubs made a total loss of £112m last year, and that only 15 clubs out of 80 respondents nationwide made a profit.
Chester's bid to be promoted to the Football League, following their relegation in 1999, would be accompanied by tight financial management, said Mr Smith.
The challenge appeared all the more difficult yesterday after supporters said they would continue to boycott home matches and maintain picket lines outside the Deva Stadium.
With many fans vowing to stay away from games until Mr Smith has severed his links with the club, the lack of any firm offers from potential buyers is expected to have a huge impact on ticket sales.
Mr Smith said that perhaps the most crucial factor in the club's bid to avoid losses would be a scheme to diversify the use of the stadium for events such as pop concerts.
He was optimistic that a meeting between the club and Chester City Council later this month would give the green light to bring in extra revenue.
He said: "We have been running the club with a skeleton staff to cut down on wages, but it is unbelievably hard.
"The only way we'll ever be able to survive and develop is if the council allows the club to do other events here and, after two years of negotiations, we are right on the edge of being able to do that." He added: "At some clubs, fans will be happy if you are millions of pounds in debt as long as you're winning, but it is a time bomb and the debt was getting bigger and bigger when I took over. We will do well to break even."
An ongoing legal wrangle with former manager Kevin Ratcliffe will pose a further threat to the club's financial health this season.
The club's bid to block Mr Ratcliffe's claim for a £200,000 severance package collapsed in May after a senior judge threw it out of the high court.
Former Everton star Mr Ratcliffe was with the club as a player and manager from 1994 until August, 1999, when personal differences between him and Mr Smith prompted him to invoke a "golden parachute" clause in his contract, entitling him to a £200,000 pay-off.
The club fiercely contested the claim, but its objection was overruled last May when The Football League Appeals Panel decided that the agreement stood.
But, despite the club's difficulties, Mr Smith said he was proud of its record in recent years.
"When I came to the club we were £1m in debt and were losing an average of £400,000 a year," he said.
"We paid all that off in the first year and made a trading profit for the first time in the club's history. Unfortunately, it all went into paying off the debt."
He added: "We were one of the only teams in the country that made a profit and the only one below the first division.
"Last year we broke even and we have to find a way to do it again."
Club secretary Michael Fair said: "If a club isn't supported it cannot reach its full potential. If fans don't come through the turnstiles, a club has to look again at its budget."