European soccer clubs have allowed losses to collectively soar to a record €1.7 billion and failed to control escalating player salaries.
This is despite repeated warnings from UEFA about the grim future football faces unless such spending is curbed.
Football is reflecting Europe's economic turmoil, with half of top division sides seeing their financial situations worsen in 2011, according to a financial analysis published by UEFA.
Over five years, club losses have trebled to a record €1.7 billion and the cost of paying players has leapt 40% to €8.6 billion.
"Economic austerity has raised general awareness of the fact that action can no longer be delayed," Andrea Traverso, UEFA's head of Club Licensing and Financial Fair Play, said.
While the revenue generated by clubs in 2011 rose by 3% to €13.2 billion, Traverso warned that the economic crisis has made "access to liquidity more difficult in many European countries."
"An increasing number of clubs are currently facing limited funding availabilities," he said. "Without a change in behavior, the risk of clubs going out of business will increase,'' he added.
After an analysis of nearly 700 club accounts across the organisation's 53 member nations, UEFA President Michel Platini said that "Financial Fair Play" rules are vital to curbing the "financial distress" facing football.
"Keeping costs under control and within sustainable limits is, and will continue to be, the clubs' biggest challenge," Platini said.
UEFA did find that the total debt the club accounts analysed dropped by around 10% to €7.7 billion. However, 62% of clubs breached at least one of the rules designed to ensure debts are paid as they attempt to break even on football business - a condition of entry for the Champions League and Europa League.
And 139 of the 220 clubs playing in the Champions League or Europa League this season breached at least one of the "Financial Fair Play" criteria which are yet to be fully enforced.