Fleetwood Town owner Andy Pilley warns as many as ten EFL clubs could go into administration because of the coronavirus crisis, and has offered his solutions to making English football more sustainable.
With the football season suspended and expected to return with games behind closed doors for a while, many EFL clubs are facing the daunting prospect of keeping up with financial outgoings despite the huge hit in revenue.
Charlie Methven claimed Sunderland entered the crisis in a strong financial position, having cut the cost-base of running the Wearside club dramatically in the last 12 months to run ‘a breakeven model’.
But with football suspended indefinitely, the club placed all but a small, select few of its employers, players included, on furlough leave, agreeing to top up the government’s pay to ensure all staff remained on full pay.
But Pilley warns that the same cannot be said at many other EFL clubs. In a stark financial warning during a new Youtube series, the Fleetwood chief said: “My concern is that we may have double figures of football clubs that go to the wall, famous football clubs that will no longer exist and no longer deliver the quality of life and the pride to their community that they have for perhaps 100 years or more.
“We’ve lost so many revenue streams because of this and the situation we are in will be the same at almost every other football club out there.
“We find ourselves in a situation where there’s no money coming in, but there’s still money going out. It’s a basic rule of economics that your ins have to be more than your outs.
“Thankfully, we have had an advance from central funding of circa £430k. That is very gratefully received, however, it is an advance on July’s money and about £180k is a loan which has to be repaid. It helps with the cash flow problem but it’s not a long-term solution.
“In the medium term there will be no revenue either, because games will have to be played behind closed doors. It is the only way we will be able to conclude the season. That is absolutely essential.
“We have an obligation because if we jeopardize the deals in place with sponsors and broadcasters then we’re hurting ourselves for the future; we’re killing ourselves.
“As for the longer-term picture, I want to make clear I am an eternal optimist – you will not meet a more positive person than me. However, I must be a realist here. My prediction is there will be no games in the whole of 2020 in front of crowds.
“I’m basing that on a lot of information. A statement from the CEO of the Bundesliga in Germany, where they are a good two weeks ahead of us in the crisis, he says the exact same.
“When we come out of lockdown they’re not going to press a switch and everything will be back to normal. There will be a gradual release on the conditions imposed on us. Mass gatherings are not going to be permitted.
“So I’m concerned about season ticket sales for clubs. Who is going to buy a season ticket if the first game you’re likely to be able to attend is going to be January?
“What about sponsors? Who’s going to sponsor clubs? What about corporate sponsorships? These are all enormous losses in revenue for clubs.
“We can’t expect wealthy owners to bail their clubs out either. Wealthy owners are being absolutely destroyed in the business world. Pretty much whatever sector they’re in they’re being decimated. Gone are the days benefactors will be bailing out football clubs.”
In an interesting series of videos, Pilley didn’t just highlight the ominous problems facing EFL clubs, he stepped up with what he believed were four solutions, starting with shorter-term ideas.
He said: “I believe players need to agree a conditional deferral of part of their wages. We need to all work together and tough calls need to be made for the greater good.
“All of my non-playing staff have taken a reduction and the players now need to do their bit and help themselves and help their futures.
“I get that it’s a short career and you never know what’s around the corner, but this is now necessary. If we don’t make changes and help clubs through this crisis, there will be a lot less employment opportunity for them.
“The PFA have recognised this, and I would urge all players to now agree to the deferral with their clubs.
“That saving will be useful, but it will be nowhere near enough to get us through this.
“The next solution I have to credit Peterborough chairman Darragh MacAnthony for. The idea is that we should factor or finance the TV deal, which I believe has four or five years to run.
“So the idea is that if the EFL gets the money in advance, they can deliver the money as emergency funds to save clubs from non-existence. The money would be received upfront by the EFL and then forwarded in monthly trenches to clubs. Not large amounts to be squandered, just enough to fulfil minimum commitments.
“Solution three is around season tickets. I think there is a real danger fans won’t buy season tickets as they normally do. Who’s going to pay £300 up front when they don’t know when they’re next going to get to a game? I think the answer is a subscription model, which I introduced last year.
“You charge say £25 per month, and that assists with supporters’ cash-flow, and the beauty is, people can be added to this any point during the season. It worked for us. We had our best season ticket sales ever last season, and now I don’t see any other choice because I don’t see fans wanting to pay the cash upfront.”
Pilley makes some interesting short-term points which could be really helpful in saving clubs. But almost everyone now appreciates football has a deeper problem that needs to be sorted in the longer term.
EFL chairman Rick Parry has spoke recently about clubs becoming more sustainable, with far too many clubs relying on rich owners to finance them, instead of running playing costs, ie player wages, in-line with money coming in.
At Sunderland now, perhaps to the detriment on the pitch, they are far more secure off it, because they’ve brought their wage bill down to around 45 per cent of their revenue. Methven spoke recently to Sunderland Live about the emphasis they’ve placed on this, even if the supporters have been unhappy with their ambition, because they won’t risk the future of the club.
Pilley agrees that has to be the way English football moves forward beyond this, although his solution is a little more radical and would seemingly penalise a club like Sunderland who bring in far more revenue than a club like Fleetwood.
Pilley said: “Number four is one of the most important for me because it’s thinking more long-term. It’s salary caps for the lower leagues.
“Football has now got the chance to push the reset button and become sustainable for the first time in a long time. No club should overspend and put the future of the club at stake. We are where we are now, and it’s about the future and what’s at stake.
“What’s at stake is not the future of the clubs, but also, if other clubs go bust that you don’t support then the competition becomes a farce.
“Imagine a scenario where the club that wins the league is the one with the best manager, the best tactics and the best players, as opposed to just, who’s got the biggest budget and who’s prepared to bankroll their club the most.
“Next season, with most games behind closed doors, I think it should be the same budget for every club and I don’t think any team should be allowed more than 25 players, and at least four or five of those should be under 24 years old.”
No solution is going to be an easy one to put through in agreement with everyone. The ramifications of this crisis will be certainly interesting to say the least.
It seems more clear than ever that something needs to be done – as if the plights of Bury and Bolton recently weren’t enough. It’s clear now more than ever though, football needs a big change in culture.