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October 2020
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Football is not coming back any time soon: so what happens to the clubs then?

By Tony Attwood

There is an article in the Guardian which says

“Whether football returns in June or September, or later even than that, it will be a long time before it is played in stadiums packed with crowds of tens of thousands, without players having to undertake complex social distancing measures. Normal isn’t coming back any time soon.”

That is interesting, I think, because there seems to be a general assumption that we MUST have football back, and sooner rather than later.   Those who want later are dismissed as people who simply “don’t understand” football.  It has to happen so it will happen.

But really, does football have to come back?  What happens if it doesn’t – at least for quite a while?

It is hard to imagine how BT Sport and Sky will be able to sue the football clubs or the league or the FA for not providing games for them to show, when this is clearly a “force majeure” situation.  The clubs are being refused the right to play the games by the state, and the state is acting in what it judges to be the best interests of the country.  That’s not a good playing field on which to try and sue for non-delivery of a service promised in a contract.

The same situation would arise if the United States, under President Trump, declared war on the UK (quite possible for a man who talked about disinfectant as a cure for the virus), or if a meteor hit the Irish sea and there was a fair amount of flooding in the resultant series of tidal waves.

In such circumstances contracts are considered to be null and void.  In fact in both world wars, debts were not collectable – something which was of major significance to Arsenal in the first world war, since there was a massive debt to the builders in relation to converting the Highbury ground from playing fields into a stadium.

So BT Sport and Sky would have to solve their own problems.   But what of the clubs paying the staff?

If the club runs out of money, and can’t borrow any more, it can negotiate with the players and their agents.   If that is just one or two clubs then the players might well just pack their bags and move on.  If it is hundreds of players all coming on the market then they might be shocked at finding no one wants them.  Or at least no one wants them on a long term contract with the sort of money they get now.

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The point is, companies can make employees redundant if there is no work for them, and that is certainly the case now.

And what then?

Basically if the club can’t continue because the players refuse to move on or can’t find anyone to take them, the club goes into administration or liquidation.

Administrators are quite simply accountants who have somehow lost the joyful bouncy step and quick-witted humour for which the profession is normally famous.   Their job is to get the best deal for the club and those they owe money to by either finding a buyer or minimising losses.

So they would try and sell off the players, and the ground.  But most clubs will probably only realise a fraction of the money they owe, since the bulk of the earnings comes from TV, and there will be no more TV.

If the player has been purchased in the last three years the chances are the buying club has not finished paying the previous club for the player, and thus the club in administration doesn’t own the player.  So before he is sold, negotiations have to take place with the previous club – unless there is something in the contract that says this won’t happen.

Meanwhile the Football League then deducts ten points from the club (nine if it is a Premier League club).

Which all sounds fairly organised, but… we have a situation in the Premier League in which the majority of clubs won’t be able to settle their debts without the TV money, since, as has become clear in this crisis, they are mostly living on next month’s income.  There have even been articles in the media of late suggesting that Manchester United, previously considered the most stable of all the clubs, have financial issues due to the huge sums taken out of the club each year by the owners, whose preference “B” shares give them huge dividends each year, no matter what profit or loss the club makes.

Chelsea and Manchester City are as ever dependent on the whim of the owner.  Newcastle may soon be in the same situation.   But other than those three, plus Man U, questions are raised.

Kroenke as we know is a multi-billionaire, but all his investments are with sports arenas.  Maybe if the USA gets back to business quickly, he will be all right, but if not, he might not be interested in bailing out Arsenal.

Tottenham have mega-debts because of their ground, and they need the TV money and the enhanced gate receipts from the new stadium, to pay for the cost of the ground.

And the rest… it seems unlikely that most of the remaining clubs could raise enough money to survive.

As noted before, in the world wars, all business debts were put on hold by government diktat.  That may well be what football needs now.  But then if Sky and the Sprout were not paid for this season, what sort of deal would they offer for next season?

4 comments to Football is not coming back any time soon: so what happens to the clubs then?

  • Supersingh

    I’ve a feeling that this current situation will be a bit of a leveller on the football front. The passion for the game seems to be dissipating from my experience, example’s of people’s priorities ranging from bereavement, financial loss or prioritising what’s important in life.

    Football really should have known the fragile state they was in, Arsene Wenger knew this all along, tried to warn them? And got ridiculed for it. I’ve been an Arsenal supporter all my life and now cannot summon up enough enjoyment in a world full of greedy owners, overpaid football players, unlevel playing field, media companies and sheer stupidity.

    Think I’ll just go and shoot myself now.

  • Please don’t do that Supersingh. The next article is an attempt to start reversing the situation.

  • Supersingh

    Thank you Tony, I look forward to your article. Here’s hoping to a better football world, free of impartial referee’s, football authorities looking after the best interest’s of the people, TV companies developing a moral compass and a serious upgrade to football punditry.

  • Mikey

    @ Supersingh

    Sadly, I think you’ll find that the EPL was free of impartial referees before all this kicked off. It’s impartial ones we would actually like to see in future!