SURVIVAL OF THE SMARTEST

Football League clubs were plunged into crisis amid the madness – but some lost more than others. Relegated Tranmere owner Mark Palios, however, has found a way to ensure his club’s survival until at least the end of 2020- 21 – and tells FFT exactly how

If you thought your 2020 was bad, spare a thought for Tranmere Rovers. In March, the club was embroiled in a League One relegation scrap, but a sequence of three victories had left them just three points adrift of safety with one game in hand on nearest rivals AFC Wimbledon.

But then disaster struck. The season was terminated in May, with Rovers demoted to League Two thanks to the Football League’s points- per- game formula. Two months later, gaffer Micky Mellon joined Dundee United.

Rovers’ chairman Palios refused to wilt, however, and put a plan in place to ensure his side would survive – with or without the crowds – until at least the end of 2021. He explains that other EFL clubs must start to follow his blueprint…

“As soon as the Football League announced that the campaign was postponed, I started work on Project Malthus. It was a strategy to stretch our cash reserves from three months to 12 months and ensure two things: that we could continue to pay players’ wages until the end of their contracts, and that we didn’t have to make non- playing staff redundant.

“I also modelled our finances dependent on a number of start dates for the 2020- 21 season. We knew how much money would be available if we restarted in September, December or if we didn’t play games at all. Regardless of whether football returns or not, we’ll be fine financially until at least the end of 2021 because of our unique business model at Tranmere.

“Five years ago, I realised that football’s traditional money- making model, via ticket sales and club merchandise, was dead. An unregulated wages market means that clubs have to pay players over the odds, and many EFL clubs are spending more than 100 per cent of their turnover on wages. That simply isn’t sustainable.

“So, we set up an international business by creating soccer schools in emerging football nations such as China, Indonesia and the US. Clubs and coaches in these parts of the world are desperate to find out how to implement a professional coaching programme, so they can begin to produce more quality players. We’ve given them FA qualifications and been able to monetise our expertise, while building a real presence there.

“The north- west is a footballing hotbed, so we’ve been using our location and facilities as a base for foreign sides to study our setup. We’ve got fantastic links with Liverpool John Moores University, and coaches can find out how we work with them to implement sports science and nutrition effectively. The strong links we’ve forged with clubs in these areas has led to more relationships with businesses, who have invested in Tranmere.

“We’ve also installed 3G pitches, which are hired by teams in the community, and want to build more – as well as a thriving education business that has operated throughout the pandemic. We provide adult learning courses in retail, hospitality and catering, and support local primary schools.

“Five years of hard work has enabled us to build up reserves of cash, a small portion of which we’ve used to relay our pitch during lockdown. Most clubs aren’t in our position and are living hand to mouth, meaning that without income from ticket sales, they can’t afford to survive. Wigan have already gone into administration and I know that at some clubs, players haven’t been paid. That will just get worse if fans don’t return to grounds.

“Now is the time for Football League clubs to reset their business models and build towards a profitable future – but that won’t happen overnight. The EFL should set a goal for clubs to become sustainable in the next five years and help them tackle the issue of player wages, which is crippling the game.

“One simple solution is for authorities to allow clubs to insert force majeure clauses into contracts, which would enable them to reduce wages significantly during unique crises such as this. As it stands, clubs have to pay players 100 per cent of their wages until the end of their contracts even if they don’t kick a ball in that period. Reducing wages by 50 or 75 per cent would give struggling sides a much better chance of survival.

“Parachute payments should be scrapped. They create a wealth divide and a lethal cocktail: clubs overspend because they know they have that cushion, while those beneath them gamble and spend increasing sums trying to bridge that gap.

“Failure to act now will see clubs go out of business and deal communities across the UK yet another blow during troubled times. No one wants to go back to the way we were doing things before. If we act now, football can survive and thrive after the pandemic.”