Coronavirus: The financial cost of the Premier League being suspended
Disease has caused major disruption to sport’s calendar
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Your support makes all the difference.On Friday, the Premier League announced its season would be postponed until 3 April at the earliest due to the outbreak of coronavirus.
The EFL made the same decision, while Scottish football has been suspended indefinitely.
Matches in the FA Women’s Super League and Women’s Championship have also been postponed.
As a result of the suspensions, clubs, their employees and related businesses all face an uncertain few weeks.
“Two thirds of the clubs in the EFL are losing money, and therefore are reliant on owner contributions on a regular basis,” leading football finances expert Kieran Maguire said. “My concern now is the owners might be reluctant to pay the money across.
“Also many of the owners are local businessmen who are running their own companies and themselves will be suffering financial distress as a result of Covid-19. They might be struggling to pay their regular staff because they have lost orders or not been able to fulfil contracts.”
Some have speculated that certain clubs could even go under as a result of the lack of cash flow.
“Historically those owners have been subsidising the football club out of the proceeds of their own business,” Maguire said. ”If their own business starts to struggle, which is what happened at Bury last year, then you can easily see that situation being repeated on a more regular basis, given that the clubs are living from hand to mouth and relying on these owner handouts.”
Maguire also addressed the possibility of the Premier League sharing its vast wealth with lower-league clubs.
“In the most recent Premier League accounts, they had over £1.5 billion cash sitting on the balance sheet. I appreciate that money is allocated to be distributed to the members, but if the Premier League says, ‘Well as an act of good faith towards the football community, we are going to give £250,000 to each club in League One and League Two,’ it would cost them £12 million. Now that would not buy them a reserve full-back [in a Premier League team], but it would buy time – and that is the most important thing.
“It could be done on a gratis basis – just to say, ‘Well, we are going to help out the lower league clubs,” or it could be done on the basis of an interest-free loan. It would be saying. “We are living through exceptional circumstances and we feel we have a responsibility towards the wider football community to be seen to be showing leadership and solidarity with those clubs.”
The betting industry is also a major part of the football world and stands to suffer as a result of the suspended seasons.
“In the short-term, the betting industry will survive – people turn to other forms of entertainment with matches and events which are not being postponed,” Maguire said. ”The betting industry is ridiculously wealthy any way. I don’t think the betting industry itself will suffer.
“But on a short-term basis you could see individual betting shops perhaps being closed down, because the footfall is not going to be there because people are self-isolating.”
There are numerous businesses located in the vicinity of football grounds that also stand to be harmed by the move to suspend games.
“There will be an impact on the hospitality and tourism industry, to a far greater extent than it will on football,” Maguire said. “As somebody who works in Liverpool, I talk with the local Chamber of Commerce, the people at local hotels.
“If Liverpool are playing at home, they have a huge football fanbase, so every hotel on a Friday and Saturday night is full when there is a match at Anfield. That means that there are going to be job losses in those particular industries, because they tend to have many part-time staff.”
With so much uncertainty around the way the Premier League will finish – if at all – some have suggested clubs in the relegation places could have gorunds on which to sue, should they be eliminated from the Premier League in unusual circumstances.
“Certainly clubs will be taking legal advice,” Maguire said. “The difference between a Premier League broadcasting deal, which is worth a minimum of £100m a season, to the £7m you get in the Championship is so significant that I think clubs would be foolish not to explore all options, including making a litigious appeal.”
PA
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