A locked gate is seen by the Etihad Stadium where Manchester City was due to play Burnley in an English Premier League soccer match Saturday March 14, 2020, after all English soccer games were cancelled due to the spread of the COVID-19 Coronavirus. Photo: AP Photo/Jon Super
A locked gate is seen by the Etihad Stadium where Manchester City was due to play Burnley in an English Premier League soccer match Saturday March 14, 2020, after all English soccer games were cancelled due to the spread of the COVID-19 Coronavirus. Photo: AP Photo/Jon Super

OPINION: Virus derailing football gravy train

By Ian Herbert Time of article published Mar 28, 2020

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It would have helped if any football club had bought insurance against the events which have befallen us, though none of them did.

‘The box is there in the “event cancellation” policies,’ says one insurance industry leader. ‘But companies insure against events they can conceptualise and imagine: terror attacks, biochemical attacks, freak weather or the death of royalty. No one saw this.’

And so came the week when football, from top to bottom, faced up to the fact that it is anything but immune to the bleak financial realities of a shutdown which, in the view of one experienced and highly respected chief executive, means we may not see the sport played again until August.

The match revenue tap has been turned off, which punishes a club like Arsenal, who earn 24 per cent of their annual revenue from it. But far more significantly for the gilded top flight, there is no product for the broadcasters, who are going to want some of their money back — £762million of it, if the season is not completed.

The clubs have banked and, in most cases, spent this money. ‘Fail to finish the season and many will be in breach of Financial Fair Play rules,’ says the insurance source.

The list of those that clubs will need to reimburse extends way beyond the broadcasters, who stand to lose £700m, and in Sky’s case have created an easy-to-negotiate ‘subscription pause’ button because customers were cancelling in their thousands.

Manchester United announced yesterday they would refund tickets if the season is scrapped or remaining games are played behind closed doors, with the option — much preferable to them — of fans receiving a discount on a season ticket for the next campaign, whenever that may start.

There was uncertainty last night about whether there would be wage cuts or deferrals across the board, with the Professional Footballers’ Association fighting hard against cuts. But the EFL would like to see the PFA being more accepting that the players will have to bear some of the brunt.

Some major clubs have already started that process, with Birmingham City’s deferral of 50 per cent of player salaries the first such move in the Championship. Leeds United’s players volunteered for such a cut as the club, losing several million pounds of income a month, tries to maintain employment for 272 full-time, non-football staff.

It is in the world beyond the Premier League that the chill is at its harshest, because that is where clubs rely on gate receipts to contribute to a wage bill and survive.

‘Cash flow is their only consideration now,’ says Kieran Maguire, football finance specialist at Liverpool University. ‘Do they have enough money in the bank to pay the next bill as it falls?’

The EFL’s £50m relief package, announced on Wednesday, has helped, though it is not a panacea, Maguire cautions.

One chunk of it is an advance of the final Premier League solidarity payment of the season. The rest is an interest-free loan, though it is hard to see the League pushing for repayment given that an existential crisis lies ahead.

For many clubs, hospitality and conferencing streams built up to make their stadium earn money beyond match-days will take years to recover. Even when football returns in front of spectators, local companies will lack the budget to splash out. There might well be an adverse reaction to conspicuous spending and an £80-a-head hospitality package.

Those with a wealthy benefactor — from Stoke City with the Coates family to Stevenage with Phil Wallace — will survive these severe times because they have the means of a monthly bail-out. Those without benevolent, committed and wealthy owners will struggle.

It escaped attention on Wednesday that a list of 300 winding-up cases, due to be heard in London but cancelled because of Covid-19, included those for Oldham Athletic and Macclesfield Town.

EFL chief executive Rick Parry, a wise voice in these challenging times, has argued for an end to the ‘begging bowl culture’ in which clubs seek help from the Premier League. Maguire insists there must be far more commercial realism and pragmatism.

But beyond the gratifying work that top-flight clubs are doing in the community — Brighton and Watford in the vanguard — it is within the grasp of one of the top Premier League sides to score a monumental public relations coup which would win that club lasting affection among thousands of lower-league fans. At a stroke a club such as, say, Manchester City or Arsenal could ensure the future of football in the EFL by making, perhaps, a £50m contribution to a fighting fund for football. To put that sum in perspective, Manchester United’s wage bill is £332m. United, among others, will have saved tens of millions by May in appearance fees and player bonuses which become non-payable.

With clubs’ futures intact, the EFL and National League could then set about working to establish greater sustainability.

Financial Fair Play, a more crucial concept than ever, would be at its core. A more sustainable world, perhaps a part-time world, would begin for clubs which simply do not attract the numbers they did in the 1950s.

For now, clubs are attempting to live week to week. The Championship season has stopped with Luton Town in the relegation zone but that is the last thing on chief executive Gary Sweet’s mind.

‘It’s inconsequential where Luton finish or what division we are in next season if there isn’t a next season,’ he said. ‘We have to keep football intact.’

Daily Mail

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