David Sullivan sold his stake in Birmingham in October

Former Birmingham owner David Sullivan has revealed his shock at the state of Premier League clubs' finances.

"The state of the finance of football is frightening, that's all I can say," Sullivan told BBC Radio 5 live.

"Many clubs have pre-sold their Premier League income and TV money, and have borrowed against season-ticket money."

Sullivan, who sold his Birmingham stake to Hong Kong businessman Carson Yeung last October, says a Premier League club could go out of business soon.

Over the past three months Sullivan has been looking into the finances of 20 clubs, including West Ham, with a view to getting back into football.

He is unable to talk about his interest in West Ham after signing a confidentiality agreement.

But, having looked in greater detail at the way other clubs are run financially, Sullivan believes it is possible a Premier League club could go out of business.

"I think there's a possibility one (Premier League) club could go and I think probably odds-on one club will go," said Sullivan.

"There are several Championship sides absolutely on the line at the moment. It's a question of whether they can sell players for sufficient money to stay alive.

"But there's not a lot of money out there to buy players at the moment. Even some of the clubs who you think have got money really haven't got much money to spend on players."

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