Coronavirus
Health Warning
What follows are some of the possible implications on football of coronavirus. Further announcements may well change the course of thinking.
All information is based on known facts and assumptions are stated.
It is unknown whether "force majeure" could be invoked on any contract (e.g. TV deals or player contracts). However, subsequent discussions on player contracts have seen the only a few local instances of agreements on player wage deferrals / cuts whilst big numbers are mentioned in regards to lost TV money (which filters down through EFL and into National League as "solidarity payments").
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Andy McMillan: Chasing Ryan Giggs was harder than tackling coronavirus.
YCFC - Financial Impact
York City announced a record 1,300+ season ticket sales for the 2018/9 season. Assuming a small reduction to 1,000 for the 2019/20 season, that leaves a pay on the gate attendance of 1,500. Assuming an uplift to 2,000 "pay on the gate" for those last 4 games paying an average admission of £14 that makes about £28,000 per game, or £112,000 for the 4 remaining games from Altrincham onwards. Take away VAT and that leaves City short by about £94,000 of potential "pay on the gate" income. In the scheme of things, refreshments and programme sales will be insignificant amounts of revenue.
With 1,000 season ticket holders, assuming an average ticket price of £10, that equates to £33,000 that City have received in season ticket sales to cover the last 4 home games of the season. You could argue that it should be paid back if the games are not played, alternatively, it could be discounted from renewals for next season. Later, the groundswell of opinion on TOOAB suggested many season ticket holders would not want a refund.
On April 2nd, City announced they'd "closed the club for the foreseeable future" and had used the government's Coronavirus Job Retention Scheme to place staff and players on furlough until further notice. The chairman will ensure that all staff receive 80% of their wage during their time on furlough, irrespective of the government scheme's upper limit. The government scheme pays 80% of monthly wages up to £2,500 a month (approx. £576 per week)), so someone earning £576 a week will get £461 from the government scheme. It can be assumed that many senior professionals will earn more than that. On April 9th, Sean Newton when speaking to the "Shooting Towards The Shippo" podcast praised Jason McGill for his efforts and communications with the players during the lockdown period.
With staff (players and non players) on furlough, any decision to resume football will mean ending furlough and paying wages again. If games are held behind closed doors, there will be no match day income.
On April 9th it was confirmed that the National League had received £2m from the Premier League to help clubs with the financial difficulties they are facing. National League clubs will receive £58,333 and those in the North and South divisions will get £13,636. The money will be advanced to clubs next week. The cash represents an advance on payments that were due to be paid to clubs as solidarity payments in August. It is not additional money. The amount is considerably less than many clubs had previously announced as lost income due to cancellations and is due to be distributed as other solidarity payments would be distributed. At the same time, it was announced that the National League would vote on how the 2019/20 season should end, it was stated the 68 clubs across the 3 leagues would have 32 votes (one per National League club and 4 for each of NLN and NLS, the regional votes would probably be cast as a result of a poll amongst constituent clubs, rather than 4 clubs each having one vote). The voting split mirrors the old days of The Football League when the big boys got more votes. One school of thought suggests the majority of NLN teams might vote in favour of any proposal that would see City, many teams' biggest home gate, remain in NLN, another says the upper league would welcome City's big away support to their division.
Equally, any resumption after April 30th will come at a time when some (many?) City players may be out of contract, meaning it may be difficult for City (and other clubs) to field representative sides on resumption if those players out of contract aren't available. End of contract may be seen by many clubs an ideal time to cut costs and it is unlikely that any new 2020/1 contracts will be offered until there are firm plans for the start of 2020/1 season. Whilst many non league player contracts end on April 30, for the Football League, the equivalent date is June 30. It has come to light, that clubs must pay their released players their normal salary in July if they haven't signed for a new club, think of it as an extended notice period, presuamably the same applies to contracts ending in April.
In the Football League, the profits from each play off game is distributed, half (50%) between the 2 teams (25% each) and rest (the other 50%) is shared by all clubs in the league. Given small NLN gates and a real possibility of behind closed door games, if the same principles apply, the pot will be small (and quite likely non existent). Play off teams will be worse off as they need to end their furlough, pay the wages and possibility extend contracts. In a normal season, it could be assumed that the 6 teams in the play offs will take half the pot (say £62,500 based on an average play off game gate of 2,000 (£15 each) and the split based on how many play off games each club plays and the attenadance at those games) and all 22 clubs will share the other £62,500 (approx. £2,840 each).
With 4 home 2019/20 league games still to be played, that’s about £94,000 income (see above) and if City made it to the play off final a further 2 home games, assuming 3,500 crowds (at £15 each) that’s about £25,000 (both figures after VAT). That's £119,000 in total. The admission price may be slightly high but could be assumed to include hospitality and other matchday income, less an allowance for match day expenses. A further complication is season ticket sales. However, the only guarantee is 4 home league games and "on the gate" revenue, about £94,000 in lost revenue. City themselves estimate they have lost "upwards of £250,000 in revenue".
A bigger impact might be on 2020/1 finances. Until there is certainty over which division City are playing in and the number of fixtures (i.e. if in NL rather than NLN, it can be assumed a higher budget is required to be competitive and if there is a truncated season where teams play each other just one, a team might be able to manage with one or 2 less players). More importantly, season ticket sales cannot commence which may cause a significant amount of income to be deferred (and some possibly lost).
Whilst The Vice Presidents are well on their way towards reaching a £10,000 target to boost the 2020/21 playing budget and YCS donated £1,000 after missing out on their annual hospitality box due to coronavirus, these are small amounts in comparision to outgoings during the 2019/20 season which are estimated to be upwards £25,000 per week. Match day income is vital to ensure City's survival.
Whilst the above YCFC figures are based on assumptions, they shouldn't be too far from reality.
YCFC - Possible 2019/20 Scenarios (April 2020)
National League - What If 2019/20 Is Voided
YCFC - Players
Contract information is not always readily available, but from what has been stated, the following is a realistic scenario.
In January 2020, Steve Watson said he'd signed 2 players on 2 year contracts. Earlier press reports had stated 2 other players were signed on 2 year contracts. The 4 are Paddy McLaughlin, Ryan Whitley, Kieran Green and Peter Jameson.
Given City's recent years, it is highly likely that several of the 2019/20 newcomers were signed on one year contracts with an option that City could extend for a second year. Think of some of this season's newcomers, possibly McNulty, Maguire and Bond included.
For the others, they will be on one year contracts that will end on June 30 (or maybe on April 30). Those players would receive no pay from City after their contract ends and would be free to sign for a new club.
Note, it is possible that some players whose contracts were due to end in April / June 2020, may have already had their contracts extended, however, nothing has been published.
Under Football Association regulations, players must be notified by clubs if they wish to be retained (and offered new contracts) by the end of their contract. Once a contract has expired, a player will not be paid and is able to sign a contract for another club.
Given coronavirus, it is quite possible that until football's calendar is confirmed and matches are underway, then it is possible that many clubs would not want to commit to new contracts (especially if they don't know which division they be in next season).
YCFC - 2020/1
Once again, Jason McGill / JMP have stated that funding is available to cover City's next season as per the 2018/9 accounts published in March 2020. This extends previous statements that had said such funding was in place until YCFC moved to Monks Cross.
Regardless of which division City play in during the 2020/1 season, central funding will be relatively small and there is probably little significant difference in the amount regardless of which league City play in.
At the end of the 2019/20 season, just one team is due to be relegated from Division 2 and 2 promoted from National League. This will restore the Football League to 92 clubs following Bury's demise. Consequently, the National League will be left with just 23 clubs. Some shuffling will see it restored to 24 clubs (3 (not 4) relegated, or (less likely) more promoted).
Given football's finances, it is always possible that one (or more) clubs might not make it, leading to more shuffling to maintain the expected number in each division.
Premier League / English Football League - Financial Impacts
Using best available data, across the PL / EFL, following the suspension of PL / EFL football on March 13, the loss of income might be something like the numbers below.
They assume 70% of attendance is season ticket holders, £3 per spectator spend at ground (equally split between profit and cost) and TV revenues excluded. No consideration is given to the season ticket revenues already received that cover the games at the end of the season.
The PFA are usually very firm in contracts being paid in full, so it will take them and other parties to agree to any wage reductions to see clubs through the lockdown.
Some clubs may incur lesser losses when in furlough than when not, especially during the "close season".
League Attendance Season Ticket Holders Pay On Gate Match Day Ticket Price (£) Gate Take (£k) In Ground Spend Profit (£k) Total Match Day Take (£k) Premier League 36,000 25,200 10,800 30 270 54 324 Championship 19,000 13,300 5,700 25 119 29 148 League 1 8,800 6,160 2,640 20 44 13 57 League 2 4,500 3,150 1,350 20 23 7 30 So, based on an average Premier League crowds of 36,000, there is a loss of match day revenue of £324,000. However, it must be noted, many clubs are far from the average, Manchester United and Bournemouth being the extremes.
Elsewhere, Division 1 and Division 2 clubs collectively put their loss if the remaining games are not played slightly higher at about £50m.
With some clubs already in financial trouble, both Southend and Macclesfield were late paying February wages, the impact of no match day revenues may be fairly immediate for some clubs.
Going forward, any plans to have a truncated 2020/1 season will have to assess the impact on club finances. Any reduction in games will have an impact on income.
On March 18, The EFL agreed to release £50m short term relief fund to help clubs, a mix of early release of solidarity / award payments (totalling almost £30m) and an interest free loan facility. Championship clubs will receive their remaining £800,000 award payment from the Premier League and be able to apply for a £584,000 interest free loan. For League One clubs, the figures are £250,000 and £182,800 and for League Two clubs £164,000 and £119,800.
On March 19, Steve Thompson, Dagenham and Redbridge FC MD said the National League may need up to £20m of government money to help survive the impact of the coronavirus and believes the National League is not in a position to be able to offer a relief package to its members. The full figure looks high compared to the EFL's £50m, equating to £294,000 for each of the 68 clubs.
Any prolonged furlough and / or suspension of football might be a driver for lower league / lower paid players to leave the game at the end of their contract.
In the Premier League, for the 2018/9 season, central payments made to the various clubs ranged from £150m for Manchester City down to £96 million for Huddersfield. It was made up of 3 main components ((equal share (£34m each), amount based on TV appearances and merit payments based on finishing position (approx. £420m)). With 42 games still to be televised at the time of the coronavirus suspension, it could be argued that the remaining TV money isn’t available (approx. £762m (£371m Sky, £50m BT and £341m overseas)) and if the league is declared null and void, there are no finishing positions, meaning no merit payments, which range from nearly £40m for the champions down to just £2m for the bottom club. How would the clubs feel if all that money wasn’t available for distribution? Equally, Football League clubs have their own TV deal and filter down money from the Premier League, to a Division 2 side this is worth about £670k a season, with around a fifth of the seasons still to play, that's about £130k per club.
At the time of suspension, it was estimated that Premier League clubs held about £260m of "unspent" season ticket money out of a total £1.2bn spent on season tickets.
On other impacts / shortfalls include:
Premier League / English Football League - Transfer / Contract Impacts
With contracts ending on June 30, consideration will need to be given to squads playing 2019/20 season game after June 30 2020.
Hakim Ziyech has already signed a contract for Chelsea, can he play in 2019/20 games for them after this date, or will he be ineligible. He has no contract beyond June 30 with Ajax so wouldn't be able to play for Ajax. Equally, Dean Henderson signed a "season long" loan with Sheffield United, presumably with an end date of June 30 (or earlier). Where does that leave Sheffield United if he can't play for Sheffield United after June 30? Without a first choice keeper.
Equally, Oliver Giroud is out of contract after June 30, even if FIFA allow out of contract players to play for their existing club after this date, there is nothing to say the player has to sign an extension or to play for his existing club.
FIFA need to determine what the rules are for eligibility for 2019/20 season games played after June 30. If they decide out of contract players can only play for their current club, that might influence some players to sign a short term extension to ensure they are paid.
FIFA need to confirm any changes to the summer transfer window based on any revisions to the planned 2020/1 season dates.
Wider General Principles
Scheduled World Calendar
New Calendar
Given football's hierarchy (and self interests), it is highly likely that FIFA and / or UEFA will set the agenda on any revision to football's calendar.
They both have their business partners and won't want to see any adverse impact on their revenues from those business partners.
Accordingly, it is likely that domestic leagues will have to dovetail with FIFA / UEFA dates, although that may be dependent on each individual country's recovery from coronavirus (and consideration of any regional specific conditions / isolation). UEFA have a stated target of June 30th to complete the 2019/20 league season across Europe.
Planning will need to consider the close season between 2019/20 and 2020/21 and the time needed to sign new players and go through pre-season training.
Premier League / English Football League - Composition
Somewhere along the line, the football pyramid needs to shuffle to take account of Bury's demise.
It has been agreed that only one team will be relegated from Division 2 with 2 teams promoted from the National League. That will mean an imbalance in National League which will probably be resolved by relegation to the regional National Leagues of only 3 clubs rather than the usual 4.
For 2020/1, it had already been agreed that the regional National Leagues will each be increased by 2 clubs to 24. It is believed that this has been deferred due to coronavirus.
Another thought has promotion only (no relegation) throughout the pyramid at the end of the 2019/20 season, resulting in 22 teams (assuming no team promoted via the play off) in the 2020/1 Premier League with respectively 25 (3 promoted into it) / 24 (4 promoted into it) / 22 (lose 4 to D1 and 2 promoted) in the EFL divisions. Not sure if Premier League clubs would want to split the monies 22 ways rather than 20 and indeed where they'd fit in an extra 4 games.
Premier League / English Football League - Finances & Random Thoughts
Very few people will have seen the small print of the TV deals and finances involving the PL / EFL clubs.
It has widely been quoted that the Sky / BT TV deal values each televised game at over £11,000,000. It is the TV money that funds prize money. For 2018/9 in the Premier League, it ranged from Huddersfield's £93.6m up to Liverpool's £149m. The TV deal also funds the £140m that is distributed annually as "solidarity payments" to EFL clubs and for the 4 NL teams who've been relegated from the EFL in the past 2 seasons.
If the TV companies claw back any money from the PL from their TV deals, a realistic knock on effect is that the PL reduce their "solidarity payments". TV companies might see that as a reasonable stance if this season's games are lost or a truncated 2020/1 season is played.
One suggestion, made by Karen Brady and others, is to void the 2019/20 season and go straight into a 2020/1 season. An eminently sensible suggestion, but would they "null and void" their £100m+ TV income from the "null and void" season?
Equally, given those TV deals and the amounts involved, what would the PL league clubs think of possibly losing 10% of it (say an average of £12.5m each) to fund a 22 team Premier League?
Games played behind closed doors will have financial implications. Loss of income to clubs, loss of tax to government and loss of business in the locality of grounds.
June 30 is a key date. Note only is that the date playing contracts generally finish, it is also the date when many club commercial contracts finish / start (e.g. shirt sponsorship). Liverpool's new kit deal starts on July 1st.
Given contracts and commercial deals ending on June 30, that date may be key in considerations for how to progress the 2019/20 season.
With some clubs putting staff and / or players on furlough leave, when games resumes, they will have to come off furlough, if games are played behind closed doors, there will be no gate income to support the wage bill.
Harrogate have their own unique challenge. Plastic pitches (Harrogate's generates, according to some reports, £500,000 income a year) are not allowed in The Football League. This means Harrogate would have only a small window of time to lay a grass pitch if their promotion is confirmed, both at a cost to them and a loss of significant income. With play offs confirmed, Harrogate arranged promotion triggering deals that will see a 10 week programme to replace their plastic pitch with grass kick in 2 days after promotion is assured whilst a separate deal will allow a 3 match ground share whilst the work is completed.
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