Finance expert issues a stark 'crisis point' warning to L1 clubs
Sunderland and their League One rivals will soon be reaching ‘crisis point’ unless a rescue package is quickly agreed – according to a football finance expert.
Kie ran Maguire, of the University of Liverpool, believes that financial support will be required in the coming weeks in order for EFL clubs to survive the COVID-19 pandemic – with clubs still unable to welcome supporters back into their grounds.
But Maguire doesn’t expect that bail out to come from the Premier League - who, while sympathetic, may only offer a limited amount of capital for EFL clubs.
It’ s a nervy time for a number of League One and League Two clubs, who face an uncertain future having been deprived of their main sources of income for a number of months.
Sunderland co-owner Charlie Methv en has already expressed his confidence that the Black Cats will not be one of the casualties of this tricky period, but other sides will not be as confident over their futures as they continue to be left in the dark over when supporters could return to stadiums.
It was initially hoped that fans would return at the beginning of October, but those plans were paused indefinitely as infection rates across the country began to rise again.
And the stadium ban – which could run until next year – has increased calls for the Premier League to financially support those lower down the pyramid.
It’ s a prospect which Maguire feels is unlikely, and which may not make much difference to the Black Cats regardless.
“There is sympathy from the Premier League for clubs in League One and League Two and there might be some assistance, but it won't be huge,” said th e football finance expert, speaking to The Echo.
“I think if you're a smaller club, then it could make a difference. My concern with a club the size of Sunderland is if the Premier League gives, let's say £1million, to each club then that won't go very far at a club like Sunderland who had total costs in 2019 of £69million.
"We know that spend has been reduced significantly, but even so it's going to be a challenge for them.”
The scale of financial support given to EFL clubs thus far has largely been advancements on existing payments that were owed – which act as a short-term fix rather than guaranteeing the survival of clubs.
And Maguire believes that‘ crisis point’ could well be reached in the lower leagues very soon unless there is more support forthcoming.
“The TV money from both the Premier League and the EFL - which is normally paid out in instalments during the year - has effectively been accelerated to help clubs survive,” he explained.
"But clubs still have no other income coming in and you wonder how they are going to pay wages at the end of October, November and so on.
"I think we' ll now be reaching crisis point very, very shortly unless there's some sort of funding within the next couple of months.”