Dyche is right ...it’s one rule for Amazon and another for football
SEAn Dyche was contemplating the effect of Covid-19 on football’s pyramid. ‘If the Premier League can do their bit to enhance the chance of other teams surviving, possibly they’ll step in,’ he said.
‘But if you are going to apply it to football, you have to apply it to every business. Every successful hedge fund manager — are they going to filter that down to the hedge fund managers that are not so successful?’
In a word? no. But that is because an unsuccessful hedge fund manager is, more than likely, just less effective at the job.
It is not necessarily the global pandemic that dictates accomplishment in this field.
In good times, or bad, the skill is judging the market. Money can be made in a downturn, just as easily as it can be lost in an upturn. Football is different. nothing could prepare for this particular slump.
There were plenty of clubs outside the Premier League that were going along quite nicely, or at least surviving, until coronavirus struck. The absence of crowds has turned thriving or solvent businesses into catastrophic black holes. The Premier League at least has the insurance of its television contract, and can help.
So it is very different to a hedge fund. That doesn’t make Dyche’s analogy entirely wrong, though.
Take supermarkets and the hospitality industry. One is now thriving in terms of sales and holding steady in terms of profit, to some extent at the expense of the other. People are staying home, and spending more on shopping for food, drink and other necessities. True, supermarket running costs have risen, due to the commitment to resources necessary to deal with Covid-related procedures, but both Tesco and Sainsbury’s say their profits will be stable year on year. At the same time, restaurants and related hospitality businesses have collapsed. Yet nobody is joining those particular dots.
There has been no suggestion of a levy on supermarket profits to fund the ailing hospitality trade.
Eat out to help out, that was the Government’s plan. And, when everybody did, it transpired it was the public’s fault coronavirus was on the rise again. Businesses just getting back on their feet were ordered to close early.
AMAzOn and the high street retailers form another area that might learn from football’s proposed largesse. A tax on online retailers to bail out ailing high street shops has been part of the discussion for more than two years now, yet nothing gets done.
In July, Dave Lewis, Tesco’s chief executive, called for an ‘Amazon tax’ of two per cent on online retail, saying it would raise £1.5billion, enough to cut business rates by 20 per cent for retailers.
Yet why should Tesco benefit there? Unlike high street businesses, supermarkets have the capacity for online trade and are taking it up enthusiastically.
And while online is the least profitable arm of their service, the boarded up shops in high streets do not belong to supermarkets.
Yet, still, no Amazon tax. So Dyche’s point stands.
Other industries are not expected to look after those at the bottom of the pyramid and while the argument is that football clubs are exceptional, being part of the local community, so was the high street butcher, baker and greengrocer before supermarkets undercut them all. For some reason we think Manchester United are responsible for Macclesfield Town, but if Tesco kill your butcher with mass- produced loss-leading discount meat, that’s a cheap dinner and capitalism at its finest. So let’s not pretend that those, like Dyche or Paul Barber at Brighton, who wish to look after number one are greatly different to executives in any other industry.
United are £140m down through Covid and while it can be correctly argued that Britain’s richest club can afford to take that hit, the caveat is: not indefinitely. Premier League clubs have business models set up on Rick Parry’s new normal from when he was chief executive of the top flight.
It used to be 50 per cent of broadcast revenue for Division One, 25 per cent for Division Two and the remaining 25 per cent split in half between the bottom two divisions.
That would solve just about every financial problem the Football League clubs currently face. But it would ruin the Premier League, which now budgets for keeping the lion’s share of TV revenue, while below gets what it is given. Premier League clubs would go under if broadcast money was halved. So there is no way back that would not be catastrophic for somebody. Meaning the divide grows ever greater.
There is a moral imperative to help the EFL, yet genuine fear from leading clubs who live to their means, however extravagant that may appear. This is where we are now: a gap so great that cup competitions can be placed in jeopardy by the mighty
difference in Covid protocols. EFL clubs are no longer testing, Premier League opponents test weekly. Should they even be allowed to meet, in these circumstances?
Tottenham paid for Leyton Orient’s Covid tests this week and the results were so startling their game could not go ahead. Hull, meanwhile, rejected a similar offer from West Ham, and played.
So what is the strategy here? Does it now pay to take a risk, bearing in mind that if Orient had adopted Hull’s plan, their game would have been played with the financial bonus of television coverage?
How can it be that the smart move is now blissful ignorance and the chance that Covid could spread through the Premier League like wildfire, putting the entire financial pyramid in jeopardy?
ANY EFL bail- out is being made possible by a single revenue stream: Premier League and Champions League broadcast money.
And if there are no matches, the necessary refunds would send the lower leagues’ begging letter to the bottom of a very large in-tray.
For at this point no amount of talk about football families and duty would be relevant.
‘We should be a family in football,’ said Paul Scally, chairman of Gillingham. ‘We’ve been a family for 125 years and now when a member of the family is struggling it’s time for the wealthy big brother to step up and help. It’s as simple as that.’
Well, yes and no. Scally has been at Gillingham since 1995 and anyone who has served at that coalface for a quarter of a century warrants celebration.
He’s not there for the kudos or the glory. Men like Scally help keep football in this country alive.
However, it is worth remembering that in 2002, when Gillingham were briefly promoted to what we now call the Championship he was so incensed at the plan to split a £ 90m television windfall through the entire Football League, he proposed a breakaway second tier — a division Gillingham had at that time been part of across four years in 85. So much for family.
And that really is the problem. Coronavirus is an enhancer: of every selfish trait, every protective trait, every pessimistic trait, every frightened trait.
Just as Tesco worry about Amazon but don’t lose sleep over restaurants, so Dyche will peer into the gloom and see only ambitious, jostling clubs that are desperate to take Burnley’s place, but want Burnley’s help doing so.
And he knows, deep down, it has to be given.
But he’s right: it is one rule in the tax havens of globalised trade, and quite another at Turf Moor.