By Tony Attwood
The problem we have is that everything is interrelated. The problem we have is a lot of people expect it all to be sorted out, “because it always is.”
Those two statements may seem completely separate but they are in fact part of a single big difficulty that is arising in relation to football.
As this crisis is making clear, everything in football is interrelated. And just because a lot of journalists who normally spend their time wrongly predicting transfers are now predicting that all the current problems will quickly be fixed, that does not mean that they will.
For example, in their recent conference call Premier League accountants apparently told everyone ready to listen that the cost of not playing the rest of the suspended season would be over £1bn. Three quarters of that is owed to TV companies. The rest is sponsorship money and gate money, plus the cost of refunding season ticket holders. And for the clubs that have sold players on instalments (as most players are sold), the difficulty that arises when a big club simply says, “sorry we don’t have the cash.”
Players are sold at their perceived value on the day of sale, but the money is normally paid over four years. So at any moment Arsenal might owe money to ten or 15 clubs, and have a similar number of clubs owing them money.
Arsenal are not hard up as things stand, but it only takes the deferral of TV money, or several of the players whom Arsenal have sold, to have their new clubs not pay up, and the system begins to creak. The excuse given is not “we won’t pay you” because that would mean a declaration of intent to drop out of the League system. Rather it is “we simply can’t pay you,” on the grounds that other clubs have not paid them, and the banks won’t lend them any more.
And in a way one can appreciate the banks’ position. If the banks run out of money because they have lent it to football clubs, that is hardly going to enhance their reputation with the business community and non-football going public.
So to give two specific examples, consider these. DAZN holds the rights to stream Premier League games in Brazil, Canada, Japan and Spain. It is being asked by the Premier League for its next payment. It is saying “no” because it isn’t receiving the product.
Wolverhampton, as we have repeated before, has borrowed money guaranteed by next season’s TV income. But that was with the assumption that this season’s money would all be paid on time, which it isn’t. Wolverhampton still has that debt, and now can’t repay it.
Then there is the threat of collection action. In the past that used to mean workers going on strike. Now it suggests that the clubs might band together to cut all players’ salaries until the crisis is over. One might expect a vigorous response from their trade union.
So, the total loss to the Premier League if it doesn’t run the rest of the season is £1.137bn. And it can’t just say it will wait however long it will take, because Uefa and Fifa demand players play in their competitions too, and sponsors who want their pound of flesh for this season, want next season to start on time, or at most just a few weeks late.
Meanwhile the normal issues relating to relegation are all around us. For example, players in teams that get relegated will normally get a cut of about half in their wages. Another reason why they are not that keen to take a cut of one third now.
Clubs that are likely to get promotion or win something, want the bonus the promotion brings or the prize money from winning the trophy.
Meanwhile, the notion of simply “extending the season” beyond the end of June keeps popping up, but those in the know and their lawyers keep saying “that just can’t happen” not least because many players will have contracts expiring on June 30. So clubs wanting to keep players to play in an extended season will want to offer players short extensions. Players facing uncertainty in a collapsing market will want at least one season extra. Not least because if a player gets injured playing in the end of season games after 30 June he could be out for a while – and without pay, if his contract runs out.
Clubs also don’t want an extended contract arrangement because that player then takes up one of their 25 positions next season, or sits around doing nothing but earning money.
Plus in a recent report from Fifa there were concerns about the date of opening the next transfer window not being knocked out by the old season still continuing.
And here’s another little legal issue. A lot of contracts these days acknowledge overtly or implicitly the issue of “frustrated agreements”. This applies because contracts simply cannot be fulfilled.
The most obvious example occurs when a person has signed a contract to do something but dies – the organisation he is contracted to, cannot normally sue the estate of the deceased person for breach of contract. So if Fifa acknowledges that contracts can be set aside because the coronavirus is an unforeseen event which makes it impossible for the contract to be completed, then no one can sue anyone.
But the TV companies will probably try and sue, and those cases could drag on for years. But meanwhile clubs won’t be able to sue other clubs for not making transfer payments.
It’s all a bit messy.
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