Only one month left to save clubs
ROTHERHAM UNITED chairman Tony Stewart has issued a stark warning that ‘ five to seven’ English Football League clubs could enter administration by the end of October if a rescue package for its members is not agreed shortly.
Talks have failed to broker an agreement between the Premier League and the EFL after chairman Rick Parry asked for an emergency £ 250m bail- out to enable clubs to withstand the substantial financial damage caused by coronavirus.
According to reports, topflight chiefs are only prepared to offer struggling lower league clubs £ 50m to help them with the fallout of Covid- 19 – just one fifth of what the EFL says it will need.
The EFL has said that £ 250m is needed to make up the collective £ 50m losses that clubs incurred in 2019- 20 due to the impact of the pandemic, with losses forecast at £ 200m for 2020- 21.
Without that funding, fears abound that clubs could go out of business, with no immediate prospect of fans coming back into stadiums.
The Premier League – who give EFL clubs more than £ 400m annually in parachute payments, solidarity fees and academy grants – have also stressed that the Government should also help foot the bill.
Unless an agreement is reached soon, clubs will effectively start to run out of money by the end of this month and Stewart fears the worst if the situation is not quickly resolved.
The Millers chief told The Yorkshire Post: “If it ( a rescue plan) does not arrive this month, you will see five to seven clubs going out of business. We do talk to people and there are people who are taking measures.
“Some have cut wage bills and one particular club have said it is either that or ‘ we have to close shop’. This guy ( chairman) has been in football a long time.
“If there is nothing forthcoming this month, watch this space as they say.
“We need help from one of the quarters, the Premier League, Government or EFL – or all of them put together. The PFA ( Professional Footballers’ Association) aren’t helping as they are doing their job more than well and saying: ‘ no, we are not going to take any drop in wages ( for our members).’
“There is nothing forthcoming, only that there is a little bit of optimism that something will happen. It will have to happen as if nothing does by the end of this month, there will probably be half a dozen or so going into administration.”
Stewart estimates that the Millers have already lost £ 1m due to the financial ramifications of coronavirus and expects the club to lose up to £ 3m if fans are not allowed
Tony Stewart back into stadiums for the rest of the season.
He added: “We have lost over a million ( so far). There is a question mark on sponsorships and sales on season tickets.
“People have been generous in buying kits and sponsors have been really good, but a lot of clubs are suffering because they are not getting sponsorships and cannot sell season tickets and there is no hospitality or fans in the ground. It is a lot to take on board.
“If it went on for the full season ( without fans in attendance), I think it would be two- and- a- half to three million pounds. There will be some worse than that.
“We are spending something like £ 50,000 a month on Covid testing. It is also money you did not think you would have to use. It hits you from all directions.”
In a bid to alleviate the situation, the Premier League are expected to make a fresh attempt to try and persuade the Government that it is safe for fans to return to sporting arenas – stressing that spectators can play a critical role in showing how to behave safely in public while controlling coronavirus.
It comes amid dismay within the game at the Royal Albert Hall’s recent announcement that 3,500 spectators will be allowed indoors to attend its Covid- secure programme over Christmas – over 56 per cent of its capacity – while plans to allow a much lower percentage of football fans at outdoor venues have been knocked back and test events suspended.
Believing that the phased return of spectators to outdoor sporting events can be successfully achieved without compromising safety, Stewart continued:
“It ticks the boxes and it is outdoors and we have got the space.
“Some are big stadiums from seventy thousand and then down to five thousand. To not have any people in is a bit ‘ OTT’.
“We were looking forward to October coming and getting some fans into the place, even though it was going to ( only) be a certain percentage.
“Any business has to plan and do cash flows. But it is very difficult to work out a cash flow when you have all the expenses of putting on a ‘ show’, but you have no audience to pay for it.
“That is the uniqueness of football as theatres and the like have the costs, but they have furloughed the staff and not put on a show.
“Whereas we are putting on a show and not being paid. That needs to be highlighted.”
You will see five to seven clubs going out of business. Warning from Millers owner and chairman if no bailout is forthcoming.