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Financial crisis and end of contracts cause clubs to act

By Tony Attwood

A sense of wait and see has been replaced by a sense of “let’s do something” in football, as the realization sinks in that doing nothing will inevitably lead a number of clubs into financial administration or indeed total collapse.  Partly it is the technical point that if a company goes into administration at the moment there may be no administrators to handle the process, which has led to this sudden spurt in activity.

In fact, as is slowly becoming apparent, a whole series of issues have collided together, such as Football League clubs that have Premier League players on loan, asking if the PL clubs can pay part or all of the players’ wages, as the lower league clubs have already run out of money.  That in itself raises all sorts of contractual issues.

And this despite the release of a short term relief fund by the Football League of £50m which is now being distributed among needy clubs.

Then there is the obvious question about playing the rest of the season in order to decide relegation and promotion.  The Premier League is said to be exploring the idea of playing all the games behind closed doors, and showing the matches on TV, which will also solve the problem of the TV companies not being willing to pay their final financial installment for the season, unless they have some matches to show.

Playing any games after 30 June could be enormously complicated however, because most player contracts end on that date, and questions would arise as to who was liable if a player was injured in a match played after that date.  Also players are unhappy at playing games right at the end of their contract since that would raise the issue of financial support if a player is injured at such a time.

Cancelling the summer internationals has helped of course, but clubs and players are still nervous about how this scenario will pan out, and the unexpected legal consequences of what might appear on the surface to be a reasonable move.

Part of the problem is that England has not implemented the lockdown approach of much of Europe and although encouraging people not to meet in groups, has not overtly forbidden it, as other countries have.  No one knows what this difference in restrictions will cause.  In England the government has however already changed its approach to the virus once, and may do so again, which could further complicate the situation.

The biggest problem of playing on with the virus still raging, however, seems to be that it is bound to mean some players who are in the earliest stages of contracting the virus might play and pass the virus on through contact during the game.  Would a player nearing the end of a highly lucrative contract and looking for a new contract be willing to take the risk of playing?

A secondary factor is the fans.  Matches attract crowds into the stadia and this of course can be stopped simply by having no tickets available.  But that will mean that clubs will be in breach of their legal agreement with season ticket holders – unless a major refund or credit for next season is allowed.  While some clubs can afford that, not all can.

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Also, matches attract huge audiences to pubs that have a contract to show football, and huge crowds in pubs is exactly what the government is trying to stop at this moment.

In short each element of the proposal knocks on to cause further problems, and although many of the issues mentioned above can be solved, the solutions then give rise to more issues.  And this is before the government and/or local authorities become involved in terms of what they will allow and what they will prohibit.    At a time when the government has agreed that schools should shut, it seems unlikely that they will look kindly on anything that is going to encourage people to get together in large numbers.

 

2 comments to Financial crisis and end of contracts cause clubs to act

  • snowden

    If it were possible then all contracts be it with players or other parties involved in football etc that have contracts that finish on the 30th June, the contracts be extended to the 31 July.
    By the end of June we should know whether not it will be possible to finish this season’s league games.

    The problem of pubs that have a contract to show live games, which as you say does the very thing the government doesn’t want that is draw a crowd into a confined space. However if games could be shown in pubs once we are back to normal then that would resolve the problem but somehow i can’t think the companies that own the pubs will agree to such a compromise.

    To use an American baseball phrase we are in a situation where all parties must ‘step up to the plate’ and let go some of their legal rights in order to bring back ‘order’ to this football season.

    As Arsenal through and through I would be happy if Liverpool didn’t win the league but not because of the tragedy that has befallen everyone.

  • Essex Gooner

    Most player contracts end on 30.06

    Erm am I missing something ? (serious question)
    I’ve read that the only Arsenal player who’s contract runs out in June 2020 is Matt Macey.
    The others affected are the loan players,Mari may well be signed up, Ceballos and Soares are a bit more up in the air you would think.
    I suspect because of the money involved their will be intense pressure to complete the season,even if games have to be played behind closed doors.
    Thanks for a great blog.

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