Clubs facing £200m financial hole by September, EFL warns

EFL chairman Rick Parry was called to give evidence to the Digital, Culture, Media and Sport committee on Tuesday about the impact of the coronavirus pandemic on sport

English Football League chairman Rick Parry has warned his clubs face a £200m financial hole by September.

Parry had been called to give evidence to the Digital, Culture, Media and Sport committee on Tuesday about the impact of the coronavirus pandemic on sport, and he highlighted the particular difficulties facing the 71 clubs in his competition.

Asked in a worst-case scenario how many clubs might go out of business, Parry said: “That’s a difficult one to answer. We are heading for a financial hole of about £200m by the end of September, cash hole, that we will need to fill. Clubs are stacking up creditors as well.

“We have a great deal of uncertainty around next season of course, the great undetermined matter being when we’re going to return to play in front of crowds, which for the EFL is absolutely critical.

“We’re much more dependent on revenue – and indeed much more dependent on the atmosphere generated by crowds potentially than the Premier League.”

Parry was asked about player wage deferrals and cuts, and the role of the players’ union, the PFA.

He said the EFL was on board with the PFA’s appointment of financial services firm Deloitte to look at clubs’ books to assess if there was genuine need for a club to be deferring wages.

“We all need to share in the pain,” Parry said. “We are really having an open-book policy, and we are going to show (the players) how deep the pain is. We are absolutely on board with the Deloitte process.”

Parry said the EFL expected three clubs to be promoted from the Championship to the Premier League, or “the lawyers are going to get wealthy”.

There have been reports that top-flight clubs want to play out the season with the threat of relegation removed, but Parry said it would get very “messy” if that happened and warned it would be a breach of the tripartite agreement between the Premier League, the EFL and the Football Association.

“We expect three Championship clubs to be promoted – the Premier League are aware of our position on that. The Premier League expects three clubs to be relegated,” he said.

Asked what would happen if the Premier League’s position changed, Parry said: “The lawyers are going to get wealthy if that happens. There would be a degree of outrage from a number of clubs in our Championship, and it would be a breach of the tripartite agreement.

“The safe answer is that it would get very messy. Our expectation is there would be three clubs promoted from the Championship.”

Parry described parachute payments to clubs relegated from the Premier League as “an evil that needs to be eradicated”.

“There is strong opposition to them in the EFL, that’s almost a given, apart from the clubs receiving them,” he said. ”They are a prime example of clubs being protected or helping them adjust to the chasm (between the Premier League and the Championship). But if we didn’t have a chasm in the first place you wouldn’t need them.”

Parry said the desire to finish the season at EFL level behind closed doors was mainly a consideration of sporting integrity – saying financially there was almost no benefit.

“At our level if we were to play behind closed doors then it’s finely balanced economically, almost neutral. For many clubs it would cost them to play – the cost of staging games.”