TEN CLUBS COULD GO TO THE WALL
Championship side spend nearly all their television money on one player’s salary League One benchwarmer takes home £400k a year League Two wage budgets dwarf those in Scottish top flight. It changes now or...
The annual meeting of EFL clubs usually spreads over several days and many cocktails. An all-expenses paid trip to the Algarve for chairmen, chief executives and their partners.
At this summer’s meeting, however, representatives of the country’s most hard-up clubs will gather at a hotel in Oxford — if lockdown rules have been lifted — to thrash out self-imposed stricter rules.
The coronavirus pandemic has accelerated the need for football to reboot. ‘Sustainability’ and ‘reset’ have become buzzwords among owners over the past weeks.
Yesterday a deal was agreed which will see players from Leagues One and Two defer payment of up to 25 per cent of their wages this month — a measure clubs insisted was necessary to get them through this crisis. Club captains are now set to discuss plans for May and June. But all involved know this is just a sticking plaster and attention will turn to more permanent action this summer.
‘Change is coming — and quickly,’ one chief executive predicted. Salary caps, likely to focus on squad budgets and a tightening of financial regulations, will top the agenda and, for the first time in a long time, there appears a majority consensus to take swift action.
Proposals are yet to be finalised but the hope is EFL members will vote them through for introduction in 2021, although some will argue for greater time to acclimatise. Certainly the Championship, with squads on lengthier contracts, would need more time to realign.
The more pessimistic inside boardrooms fear as many as 10 clubs could go to the wall within months — even with the EFL’S £50million relief loan fund and the advancement of Premier League solidarity payments, a portion of which may be held back for even leaner times.
Furloughing is abundant and banks are reticent to lend given football’s recent history. Plenty have been borrowing against future earnings for years. BOLTON, Macclesfield, Southend, Oldham and even huddersfield, who partially financed last year’s takeover with parachute payments, are struggling but the list is a lot longer.
Bristol Rovers posted a debt of £24m, two-thirds of which is owed to president Wael Al-Qadi and the club’s parent company, Dwane Sports. Rovers’ average attendance in League One is 7,520 but they announced losses of £3.4m for last year. One chairman asked: ‘how do you get into that much debt in that division?’
Rochdale chief executive David Bottomley said: ‘There are people in football that for years have too easily said yes to everything. no other industry pays its employees more than what they bring in.’
new EFL chairman Rick Parry and his board have significant support among clubs who are beginning to demand change. Parry recently detailed that the Championship was spending 106 per cent of its overall turnover on wages.
Clubs can file losses of £39m over a three-year period under Profit and Sustainability Rules, guidelines they voted for after the furore surrounding Financial Fair Play’s first incarnation. ‘You can’t blame the players, they’re being paid what clubs offer,’ an owner said. ‘That’s on us. There has been a collective failure over the last 20 years to get a grip on finances.’
Sportsmail has been told of League Two wage budgets dwarfing those of some Scottish Premiership teams chasing europe. One player was offered £3,500 a week to sign for a promotion challenger in the national League.
Contracts can be worth up to £6,000 a week in League Two and one benchwarmer in League One — where Bury have gone out of existence this season — takes home £400,000 a year before tax. The sums are altogether more astounding in the Championship, running into millions.
Sheffield Wednesday face misconduct sanctions over the controversial £60m sale of their stadium, a move that Derby County and Aston Villa also undertook. ‘There was so much resistance to FFP, that’s why it was vague enough to then be exploited,’ said one Championship manager.
Portsmouth chief executive Mark Catlin said: ‘even allowing for £39m losses, that’s not enough for quite a few clubs in that league. They’ve gone way beyond that and are having to do things that, whilst potentially not against the rules, they’re against the spirit.’
There is a story of Wednesday owner Dejphon Chansiri pricing the club out of selling striker Jordan Rhodes in consecutive transfer windows and then subsidising his considerable wages on loan at norwich City, who won promotion. now back in Yorkshire, Rhodes has scored in one match this season.
Chansiri rejected a bid of £1.5m for Keiren Westwood with the goalkeeper in the final year of his contract. Westwood signed a new twoyear deal and has been jettisoned again by a different manager. Meanwhile, corporate ticket prices were hiked and hillsborough is left One with empty rows of plush boxes. star’s salary in the Championship’s top half is eating up the majority of their yearly broadcast revenue, which is around £7m.
Sunderland valued Wigan’s Will Grigg at around £300,000 before paying £3m on a panicked deadline day. Grigg, who almost left in January, has one League One goal in the last 12 months.
At Leeds, former owner Massimo Cellino watched the Thorp Arch training ground crumble while paying £20,000 a week and promising six-figure bonuses for merely staying in the division. Another owner considered cutting the academy back to three teams and hiring just one coach for under £30,000 a year.
‘When the tide goes out, you see everybody’s a***,’ Accrington owner Andy holt said. ‘It’s always been waiting for a crash. Any time I talk to anybody with a link to the Premier League, their attitude is why give more money to the EFL when it will just be blown on players and agents? It’s a fair point.
‘It’s like owners are a group of mad men, playing poker in a pub after 10 pints. I wouldn’t mind if they weren’t losing a fortune. This EFL board want to make it more sustainable. The attitude has changed.’
While the Championship operates under Profit and Sustainability, Leagues One and Two adhere to a Salary Cost Management Protocol, which has helped keep some clubs on an even keel.
But Bottomley argued: ‘So many clubs have abused it.’
holt took it a step further: ‘You can only spend 60 per cent of your turnover — unless you want to spend more! If you want to put money in, you can cover the gap. effectively you can spend whatever you want in Leagues One and Two.’
Portsmouth, fourth in League One, are bucking the trend and posted profits of £2.1m last month. ‘Owners who run their clubs in a sustainable manner are suffering,’ Catlin said. ‘The figures are out of
HOW THEY HAVE GOT IT SO WRONG. . .
control and need to be looked at as soon as possible. The current losses that are being allowed are mindboggling.’
Peterborough United owner Darragh MacAnthony has spoken passionately about a series of ideas, including a £20m fund controlled by an appointed ‘football tsar’.
‘If any clubs go into administration, on the brink of going out of business because of a charlatan owner or a wrong ’un, the EFL steps in and takes it over,’ he said. ‘Take Bury. They’d use a couple of million to keep it running and find new owners. They’d then pay back that money. If we don’t run clubs properly, the tsar can take over. We’d have to sign up to make sure we run it responsibly.’
The vast majority of clubs appear open to salary caps though details need to be finalised to find common ground, with promotion and relegation among a number of factors to be taken into consideration.
What is agreed, however, is that football must act.
‘So many sensible businessmen get caught up in the gambling,’ Holt said. ‘It’s almost like they’re writing their own obits. People call us tin-pot and to a large extent that’s true. I’m proud of that title.
‘If I had a one-armed bandit in the middle of Burnley with a £200m prize, it wouldn’t be long before everybody had lost everything, fighting in the streets.
‘That’s effectively the Championship play-off final.’