SALARY CAP IS ONLY WAY TO STOP MORE CLUBS GOING BUST
Stark warning as lower league financial crisis deepens
WIGAN’S slide into administration is just the tip of the iceberg as football below the Premier League is struggling to stay afloat.
From the Championship down, clubs are battling to survive, with more casualties expected amid the biggest crisis the game has ever known.
Bury have already gone, Bolton only just hung on, while numerous others, including Macclesfield, continually struggle to pay the wages.
It is making the mantra of EFL chairman Rick Parry
(right) to maintain a
72-club league looking increasingly fragile.
And in the huge non-league pyramid, there are even more worrying developments.
Just to take part in the National League end-of-season play-offs, Boreham Wood chairman Danny Hunter is having to remortgage his house to help meet the costs of bringing players and staff off furlough to compete.
York City – in the National League North play-offs – have budgeted for up to a £125,000 loss, which includes players and staff having to be tested for Covid-19 twice a week.
Chester FC’s players are offering their services for free, even though there are no contract guarantees, just to enable the fan-run club to take part in the same play-offs.
Northern Premier League side South Shields have been landed with a £200,000 legal bill, threatening their existence, after fronting a failed attempt by a number of clubs to force the FA into a U-turn on expunging the season for sides below the National League.
Wigan’s decision to, in all probability, sacrifice their Championship status sent shockwaves through football – not that a club was in trouble, but the first victim was so far up the ladder.
Fleetwood owner Andy Pilley, who has bankrolled the club’s leap from non-league to challenging for a place in the Championship, warned: “Clubs, including some in the Championship, need help.
“Football outside the Premier League is in desperate need of a rescue package. Without it, I fear for its future.”
He is backing plans for a salary cap, especially since many clubs spend more than they earn on players’ wages.
“If we don’t agree to a salary cap, I can see seven or eight clubs going bust pretty quickly,” he said.
Football finance expert Kieran Maguire believes that if Wigan can find themselves in trouble, then it doesn’t bode well for the rest of football.
He said: “My initial reaction was one of shock because, historically, Wigan have been a very well-run football club by comparison to many others both in the Premier League and the EFL. We’ve seen what’s happened at Bury and Bolton, the misery that it causes.”
Damian Collins MP, the former chair of the Digital, Culture, Media and Sport Committee, had put forward plans to form a Football Finance Authority with a mandate to help the game avoid problems that Wigan have encountered.
He said: “A Football Finance Authority scheme should be created by the FA – but working with and backed financially by the Government – to provide assistance to EFL clubs.”
One of the main points would be for clubs to move towards the German model where communities own 50 per cent of the club.
After launching the project last month, with most of football still in lockdown, Collins said: “We may have only a few weeks to save professional football in this country as we know it.
“The shock of the Covid-19 crisis has badly exposed the weak financial position of clubs in the EFL, many of whom were already on the edge of bankruptcy.
“The model was already broken – now I fear many more clubs will go into administration.
“Some will ultimately face expulsion from the EFL, like Bury.”
It hasn’t taken long for his foreboding words to ring true, with Parry admitting he has suffered some sleepless nights.
He is pushing for a salary cap for the three divisions.
Leagues One and Two already have one, but it is worked out over a percentage of the revenue.
Parry would prefer a hard salary cap with actual figures a club can’t exceed.
He said: “The lottery that is the Championship, with total wages at 107 per cent of turnover, losses in hundreds of millions, wasn’t sustainable at any time.
“It’s definitely not sustainable now. Something has to be done.”