Championship financial hole

[Mr Popodopolous]

Mentioned this a few weeks back, looks like it could be rumbling on.

Half of the Championship on the brink?? There may be (financial) trouble ahead.

However for now, the band plays on.

Yes I'm mixing lines a bit. We've heard this for many months but it's also worth considering that the PAYE Loans are up in the air, or might be. The PAYE Holiday ends in the coming months? Other Government support too.

I don't think we would need a loan and as I've said multiple times its a bit of a sour pill based on the method of repayment, these terms add to it but the Loans are about salvation, not Keeping the Band playing ie keeping the divisional wage average at 100%+ of Turnover.

I note that Cardiff have been quite openly vocal since last Summer about things, are they one of the 12 who are heading for issues? Parachute Payments down to ZERO next season.

They loaned Benkovic, Ojo and Wilson though in this a Covid season and signed NG and Watters then asked for the Bailout loan. Oh and sacked Harris, hired and extended McCarthy and I think Jonny Williams in too.

[Lrrr]

@Mr Popodopolous you able to copy and paste it?

[Hxj]

I have a huge sympathy for the clubs in League One and all the way down to real grass roots football where a few hundred pounds and a bit of profit from the pies, all run by volunteers makes a huge difference to many, many people.

As to £100 million to fund clubs owned in the vast majority by those wealthy beyond belief and paying ridiculous transfer fees and eyewatering salaries to an ever increasing number of individuals my answer would be simple - you're not having any of my money.   Go away, sort your own business models out and once every one of you is on making a profit over a five year average come back and talk to me again, you will of course not need the money then.

If clubs go bust so be it, unfortunately it is happening all over the country to other businesses.  It enables regeneration and growth and change.  On a Saturday more people popped into the local branches of Woolworths than even went to the local Championship match.

[Davefevs]

49 minutes ago, Hxj said:

I have a huge sympathy for the clubs in League One and all the way down to real grass roots football where a few hundred pounds and a bit of profit from the pies, all run by volunteers makes a huge difference to many, many people.

As to £100 million to fund clubs owned in the vast majority by those wealthy beyond belief and paying ridiculous transfer fees and eyewatering salaries to an ever increasing number of individuals my answer would be simple - you're not having any of my money.   Go away, sort your own business models out and once every one of you is on making a profit over a five year average come back and talk to me again, you will of course not need the money then.

If clubs go bust so be it, unfortunately it is happening all over the country to other businesses.  It enables regeneration and growth and change.  On a Saturday more people popped into the local branches of Woolworths than even went to the local Championship match.

FFP isn’t the answer.

Nor is salary caps (clubs will just spend it on fees).

EFL need to work out whether financial prudence and a level playing field can be achieved with one all-encompassing solution.  I’m not sure it can.  In which case, tackle them separately.

[GrahamC]

16 hours ago, Mr Popodopolous said:

Mentioned this a few weeks back, looks like it could be rumbling on.

Half of the Championship on the brink?? There may be (financial) trouble ahead.

However for now, the band plays on.

I note that Cardiff have been quite openly vocal since last Summer about things, are they one of the 12 who are heading for issues? Parachute Payments down to ZERO next season.

They loaned Benkovic, Ojo and Wilson though in this a Covid season and signed NG and Watters then asked for the Bailout loan. Oh and sacked Harris, hired and extended McCarthy and I think Jonny Williams in too.

Let’s hope so, odious scumbags who never paid for Sala, either.

[Harry]

If you can’t afford to pay your players, then you either release those players or you restructure their contracts. 
It’s what any other struggling business would do. 
The EFL clubs should immediately put in place a ‘football furlough’ type scheme, based on a percentage of a clubs income. 
 

What was the clubs average matchday income (tickets, season tickets, food and drink sales, merchandise etc) over the last 3 years (not to include parachute payments or sponsorship etc, just pure fan-funded income). 
Take that figure and multiply it by 80%. 
That’s your budget for next season. 
All of your players, regardless of existing contracts, need to come in under that budget. 
Whatever your club ‘actually’ earn next season is then supplemented by the EPL/FA/TV deals etc. 
 

As an example of how this would work. Let’s use City. 
 

Last 3 years matchday income. 
Just rough figures but, let’s say we earned £5m in 17, £6m in 18, £7m in 19= £18m. 
That’s an average of £6m per annum. 
 

Now, apply 80% to that and you’ve got £4.8m. 
 

All players salaries must now come in under £4.8m for the season 2021/22. 
 

If you want a first team squad of 25 players, that means an average of £192k per annum per player. 
I’m sure everyone would I agree, that’s still a very generous salary. 
Even if a player is currently contracted to £20k per week (£1.04m per year), the club have to either release the player or restructure his contract to fit the allotted budget. 
 

This seems quite an extreme measure, but it’s an immediate, overnight solution to football’s financial hilarity. 
Millions of people have suffered either redundancy or severe drop in earnings over the last year. No reason why football shouldn’t also ‘play ball’. 
 

So, City are given a budget of £4.8m. Whatever income they take in the next season goes toward that budget. If they only earn £2m, then the EPL/FA/TV subsidy pays the rest of the £2.8m. 
 

This way, clubs are still responsible for paying their own players with whatever income they do manage to bring in. The subsidy will not run into billions (rough estimate, for all 72 clubs, probs no more than £200m). Players wages are also then more manageable for when football returns ‘properly’ and clubs will be able to pay their own players with their own income. 
 

I’m sure the players on £20k pw will be peeved, but so what. Life is unfair for everyone at the moment. 
I’m sure some of the richer owners will be peeved (including SL), but so what, if you want football to survive everyone needs to sign up to bringing it into some kind of reality. 
 

There, that’s my back of a fag packet solution. 

[The Bard]

44 minutes ago, Harry said:

If you can’t afford to pay your players, then you either release those players or you restructure their contracts. 
It’s what any other struggling business would do. 
The EFL clubs should immediately put in place a ‘football furlough’ type scheme, based on a percentage of a clubs income. 
 

What was the clubs average matchday income (tickets, season tickets, food and drink sales, merchandise etc) over the last 3 years (not to include parachute payments or sponsorship etc, just pure fan-funded income). 
Take that figure and multiply it by 80%. 
That’s your budget for next season. 
All of your players, regardless of existing contracts, need to come in under that budget. 
Whatever your club ‘actually’ earn next season is then supplemented by the EPL/FA/TV deals etc. 
 

As an example of how this would work. Let’s use City. 
 

Last 3 years matchday income. 
Just rough figures but, let’s say we earned £5m in 17, £6m in 18, £7m in 19= £18m. 
That’s an average of £6m per annum. 
 

Now, apply 80% to that and you’ve got £4.8m. 
 

All players salaries must now come in under £4.8m for the season 2021/22. 
 

If you want a first team squad of 25 players, that means an average of £192k per annum per player. 
I’m sure everyone would I agree, that’s still a very generous salary. 
Even if a player is currently contracted to £20k per week (£1.04m per year), the club have to either release the player or restructure his contract to fit the allotted budget. 
 

This seems quite an extreme measure, but it’s an immediate, overnight solution to football’s financial hilarity. 
Millions of people have suffered either redundancy or severe drop in earnings over the last year. No reason why football shouldn’t also ‘play ball’. 
 

So, City are given a budget of £4.8m. Whatever income they take in the next season goes toward that budget. If they only earn £2m, then the EPL/FA/TV subsidy pays the rest of the £2.8m. 
 

This way, clubs are still responsible for paying their own players with whatever income they do manage to bring in. The subsidy will not run into billions (rough estimate, for all 72 clubs, probs no more than £200m). Players wages are also then more manageable for when football returns ‘properly’ and clubs will be able to pay their own players with their own income. 
 

I’m sure the players on £20k pw will be peeved, but so what. Life is unfair for everyone at the moment. 
I’m sure some of the richer owners will be peeved (including SL), but so what, if you want football to survive everyone needs to sign up to bringing it into some kind of reality. 
 

There, that’s my back of a fag packet solution. 

In rugby at the beginning of 'post-covid' a number of clubs made noises about the salary cap being too high and the marquee players being a threat to their existence.  SL came out clearly against this saying they should not be too restrictive because players would no longer come to the English game.  Eventually there was an agreement in the Premiership to reduce the salary cap by 25% or so from next season.  However, any contracts agreed before a particular date would only be counted as 75% of their original value as they were signed when the cap was higher.

What did Bristol do?  They got 33 players to sign extended contracts just before this deadline.  It effectively kept them within the existing rules of the cap.  The agreements had double sided options.  So either the club or the player could opt out. It kept the club within the rules but allowed leeway should they not want the player to extend and for the players they could go elsewhere if they could get a better deal.  Pat Lam has talked a lot about player retention...

https://www.bristolbearsrugby.com/news/bears-sign-33-players-to-extended-deals/

 

For City,  I'd  prefer to let it burn and for us to capitalise on the financial reckoning coming. It's taken longer to filter through to City's level due to the greater complexity and interdependence within football.  We are in as good a position as any side that doesn't get parachute payments.  Let football readjust naturally and that necessarily means clubs going the way of Portsmouth.  It will do Sheff Wed /  Birmingham good IMO

The readjustment really kicked in January with virtually no transfers at all.  The realisation that there would be no crowds hit home.  At our level there will be very occasional transfers this summer.  Squads will probably be a bit smaller and it is likely that younger players will be promoted to 1st team football earlier than before.  I can see similar windows for another year at least until virtually all the contracts offered pre-covid have run down. 

Only then can I see a return to fees being paid regularly.  You will still get players such as Brownhill and Jarrod Bowen bought by the Premier league but, for example, I can't see us paying £1.5 million for the equivalent of Jack Hunt, £3 million for Palmer  or £3.9 Million for Baker.  Those fees made little financial sense at the time and now seem mental. The players' actual value to a Championship club is nowhere near that when you consider what they are paid as well. 

 

[Mr Popodopolous]

19 hours ago, Lrrr said:

@Mr Popodopolous you able to copy and paste it?

Not a Telegraph subscriber but I'll see what I can do.

3 hours ago, GrahamC said:

Let’s hope so, odious scumbags who never paid for Sala, either.

Still appealing/debating it I think. Either way pretty low behaviour on their part.

[Harry]

13 minutes ago, The Bard said:

In rugby at the beginning of 'post-covid' a number of clubs made noises about the salary cap being too high and the marquee players being a threat to their existence.  SL came out clearly against this saying they should not be too restrictive because players would no longer come to the English game.  Eventually there was an agreement in the Premiership to reduce the salary cap by 25% or so from next season.  However, any contracts agreed before a particular date would only be counted as 75% of their original value as they were signed when the cap was higher.

What did Bristol do?  They got 33 players to sign extended contracts just before this deadline.  It effectively kept them within the existing rules of the cap.  The agreements had double sided options.  So either the club or the player could opt out. It kept the club within the rules but allowed leeway should they not want the player to extend and for the players they could go elsewhere if they could get a better deal.  Pat Lam has talked a lot about player retention...

https://www.bristolbearsrugby.com/news/bears-sign-33-players-to-extended-deals/

 

For City,  I'd  prefer to let it burn and for us to capitalise on the financial reckoning coming. It's taken longer to filter through to City's level due to the greater complexity and interdependence within football.  We are in as good a position as any side that doesn't get parachute payments.  Let football readjust naturally and that necessarily means clubs going the way of Portsmouth.  It will do Sheff Wed /  Birmingham good IMO

The readjustment really kicked in January with virtually no transfers at all.  The realisation that there would be no crowds hit home.  At our level there will be very occasional transfers this summer.  Squads will probably be a bit smaller and it is likely that younger players will be promoted to 1st team football earlier than before.  I can see similar windows for another year at least until virtually all the contracts offered pre-covid have run down. 

Only then can I see a return to fees being paid regularly.  You will still get players such as Brownhill and Jarrod Bowen bought by the Premier league but, for example, I can't see us paying £1.5 million for the equivalent of Jack Hunt, £3 million for Palmer  or £3.9 Million for Baker.  Those fees made little financial sense at the time and now seem mental. The players' actual value to a Championship club is nowhere near that when you consider what they are paid as well. 

 

I guess this is a good example of what I mean when I say that rich owners won’t like the idea. Same as the rugby, SL would want to be allowed to invest as much as he wants/can, so a cap wouldn’t necessarily suit us. 
But this is where the ‘collective’ effort needs to be recognised. We’re either gonna see 30 clubs go under or we find a solution that fits all. 
That solution won’t be fair to everyone, and the ‘well-run’ clubs might have to be held back a bit whilst everyone sings to the same sheet, otherwise there’ll be chaos. 
 

[Mr Popodopolous]

@Lrrr

Quote

Exclusive: EFL urged to 'wage war' on Premier League as clubs warn half the Championship is on brink of collapse

Help from top tier was cited by a leading executive as the only option after a £100million-plus bank loan was blocked by Treasury demands

By Tom Morgan, SPORTS NEWS CORRESPONDENT and John Percy

8 March 2021 • 5:21pm

The Football League has been urged to "wage war" on the Premier League as clubs warn half the Championship is perilously close to collapse amid bail-out turmoil.

Fresh help from the top tier was cited by one leading executive as the only option after a £100million-plus bank loan was blocked by 11th hour Treasury demands on player pay.

The Premier League, which signed off a potential £50million grant package for League One and Two but only contributed towards £15miillion in loan fees for the Championship, now has a moral duty to help, according to Cardiff City.

"We're now at the edge of an abyss and we're about to step forward," said Mehmet Dalman, the club's chairman, as he said it was "100 per cent" time to start a "war". EFL chiefs must "stand up and be counted for", he said, by returning to the negotiation table to demand a new and improved support package from elite clubs that "feed" off the Championship. "I think the EFL needs to pick a fight, not just with the Treasury, but with the Premier League," Dalman added.

Dire warnings from several leading Championship clubs were issued as Telegraph Sport reveals scenes of unprecedented acrimony between ministers and the league over the collapse in financial support.

The EFL has been left with few places to turn as relations between Rick Parry, the EFL chairman, and Nigel Huddleston, the sports minister, have been hostile since October. Whitehall took exception when Parry wrote in an open letter that clubs feel they are either being "ignored" or "victimised".

The professional game was first told to sort out its own problems last June after the first cheques were handed out from more than £100billion in Government support for jobs during the pandemic. The mood within the EFL has been described as going from bad, to worse to "apoplectic" in the last week as ministers announced another £300million support package for other sports, while also offering to fund extra matches at Euro 2020 and back a 2030 World Cup bid.

"You get a bit fed up with the empty words," said one senior figure within the league. "We hear how important the EFL is and then ministers are coming out with 'Oh Euros, fantastic - we'll do the whole thing' and then the World Cup bid. Give them a bauble and their eyes light up. When it really comes to helping out at the grass-roots level, we see where the priorities lie."

Championship clubs were given just 48 hours notice last month that the Treasury was blocking an expected payment that would amount to £8.3million for every club in need. The EFL had accepted pay freezes on executive payments, but, following last-minute instructions from senior figures within Government, the rule was extended to players too. The clauses were instated despite Arsenal and Tottenham Hotspur borrowing a combined £295m through the same Bank of England “Covid Corporate Financing Facility”.

Whitehall insiders alleged that Parry had previously told Government the EFL had private finance options, and it was unclear why this has not since materialised. That version of events is denied by EFL sources. Steve Kavanagh, the chief executive at Millwall, described the Treasury's stance as "completely unacceptable" and "ridiculous".

"The whole football eco-structure is at risk here and Championship clubs find themselves in the worst place of everyone," he told Telegraph Sport. Clubs feel cheated after many showed handed over venues and facilities as goodwill gesture to aid vaccination and testing during the pandemic. "These clubs have all stepped up when asked by the Government to support their communities," Kavanagh added. "The real story is what we did before Covid-19 without being asked and what we'll do after, because we understand the importance of helping each other. I think a lot of people need to take a long hard look at themselves and look again at what football is and does for our society."

Around two thirds of the Championship were hoping to draw down money from the Treasury-blocked loan. "Club owners have been amazing in keeping these community assets going, but they need help," Kavanagh added. "The Championship hasn't had any bailout or support whatsoever. Don't believe the smoke and mirrors, when clubs go under and communities suffer then don't be surprised."

Figures within the EFL Board suggest the competition is minded to resist a request from Dalman's Cardiff to reopen negotiations with the Premier League.

Dalman, however, says the EFL should take a much more aggressive stance with England's top tier to ease concerns in an increasingly disenchanted Championship. "The pain is substantial," he added. "The Premier League is the richest league in the world, and one of the reasons for it is because they feed off the Championship. If they didn't have promotions and relegation, it wouldn't be as exciting. So why don't we, why don't we have that fight with them.

"You cannot keep this level of uncertainty to any business, never mind football. I would be really surprised if half of them are not able to even pay wages. How far can you stretch, you can stretch maybe another month. But sooner or later something's got to give."

Cardiff say the EFL deserves criticism for failing to secure a package by now. A £15million package from the Premier League to help seek a loan after months of bargaining in the summer and autumn underwhelmed clubs. Sources close to the Premier League defended the support package, saying top tier clubs could end up recording losses of £2billion relating to the pandemic. The help announced late last year was in addition to other parachute and solidarity payments. At the start of the pandemic, funds of around £125milion were also advanced to the EFL and National League to ward off the immediate threat.

Dalman said the Championship had been let down by false promises. "EFL came out and they talked to the member clubs, and made a lot of promises, which they can't deliver," Dalman added. "We can look at whose fault that is, but at the end of the day, the EFL has got to stand up and be counted for it."

The clubs are unanimous in refusing the Treasury's demands to abandon player bonus and renegotiations. Alternative financial solutions, including the existing option of the Treasury, are still being explored by the EFL.

Figures within Whitehall suggested similar clauses had been attached to previous loans, including the two drawn down by Tottenham and Arsenal. The Government said in a statement: “We know the pandemic is having major consequences for sports sectors across the country which is why we've provided £600 million to support sports and grassroots clubs through the pandemic when survival was threatened. At the top level of football there is more ability to help themselves, as we saw with the £250 million support package we helped broker between the Premier League and the EFL. The government has offered multi-billion pounds worth of wider support for businesses, which football has also been able to access. The Covid Corporate Financing Facility is currently helping to support almost 2.5 million jobs in the UK. Companies wishing to take out loans have to agree to certain conditions on dividends and pay restraint as taxpayers would expect."

https://www.telegraph.co.uk/football/2021/03/08/exclusive-efl-urged-wage-war-premier-league-championship-remains/?

That's the article- Cardiff quite vocal again, bolded their bits.

Chansiri has been quoted a few times wanting help. That would be the same Chansiri who rolled over the Hillsborough sale to 2018/19 when it was seemingly in the wrong year.

Oh and taxation paid by SWFC in 2018/19 with that sale making a Pre Tax Profit of £19m? Zero. Same with Derby when Pride Park was sold to yield a pre-tax Profit of £14.4m- wonder if Morris and co are also clamouring for a bailout.

[Lrrr]

Cardiff talking about morality is hilarious 

[Mr Popodopolous]

In terms of this, I'm conflicted. I don't want any clubs to go bust verbatim, but I'm split two or three ways.

On the one hand certain clubs merit admin for how badly they're run- richly deserved! Why should Stadium Selling clubs and those in receipt of Parachute Payments get anything from the Bailout at all. I mean anything. Bail them out for the result of their own greed, hubris and stupidity? **** that.

On the other hand, there are those who will be close to the wind ie small profits/modest losses who will be clobbered by Covid. Tight margins- I'm thinking specifically Barnsley, Luton and Rotherham in the first instance. Millwall and Preston too? Albeit bigger clubs arguably.

Then you have many in the middle who are neither one thing nor the other- or have been bad but are heading for better financial management- or have good Transfer Profits but high wages/costs- basically fit neither of the two.

However I suppose a problem with Administration is that small creditors and local suppliers will lose out- always happens, as might HMRC to some extent but unsure how that operates now. Pennies in the pound, CVA etc.

[Mr Popodopolous]

9 hours ago, Harry said:

If you can’t afford to pay your players, then you either release those players or you restructure their contracts. 
It’s what any other struggling business would do. 
The EFL clubs should immediately put in place a ‘football furlough’ type scheme, based on a percentage of a clubs income. 
 

What was the clubs average matchday income (tickets, season tickets, food and drink sales, merchandise etc) over the last 3 years (not to include parachute payments or sponsorship etc, just pure fan-funded income). 
Take that figure and multiply it by 80%. 
That’s your budget for next season. 
All of your players, regardless of existing contracts, need to come in under that budget. 
Whatever your club ‘actually’ earn next season is then supplemented by the EPL/FA/TV deals etc. 
 

As an example of how this would work. Let’s use City. 
 

Last 3 years matchday income. 
Just rough figures but, let’s say we earned £5m in 17, £6m in 18, £7m in 19= £18m. 
That’s an average of £6m per annum. 
 

Now, apply 80% to that and you’ve got £4.8m. 
 

All players salaries must now come in under £4.8m for the season 2021/22. 
 

If you want a first team squad of 25 players, that means an average of £192k per annum per player. 
I’m sure everyone would I agree, that’s still a very generous salary. 
Even if a player is currently contracted to £20k per week (£1.04m per year), the club have to either release the player or restructure his contract to fit the allotted budget. 
 

This seems quite an extreme measure, but it’s an immediate, overnight solution to football’s financial hilarity. 
Millions of people have suffered either redundancy or severe drop in earnings over the last year. No reason why football shouldn’t also ‘play ball’. 
 

So, City are given a budget of £4.8m. Whatever income they take in the next season goes toward that budget. If they only earn £2m, then the EPL/FA/TV subsidy pays the rest of the £2.8m. 
 

This way, clubs are still responsible for paying their own players with whatever income they do manage to bring in. The subsidy will not run into billions (rough estimate, for all 72 clubs, probs no more than £200m). Players wages are also then more manageable for when football returns ‘properly’ and clubs will be able to pay their own players with their own income. 
 

I’m sure the players on £20k pw will be peeved, but so what. Life is unfair for everyone at the moment. 
I’m sure some of the richer owners will be peeved (including SL), but so what, if you want football to survive everyone needs to sign up to bringing it into some kind of reality. 
 

There, that’s my back of a fag packet solution. 

Interesting ideas certainly- but it seems problematic in real terms on a number of levels, not that I disagree much with the sentiments. Absolutely radical and necessary for the times we're in arguably.

The problems I see, and again not necessarily from a place of disagreement:

1. The fact that the Salary Cap for Leagues One and Two fell by the wayside in February- granted the PFA weren't consulted in full blah blah but sets a problematic precedent, or kicks the can down the road in terms of ability to reform at least. Gordon Taylor was the monkey but this guy was the organ grinder- well I can't dig out a suitable image, but Nick De Marco QC!
2. The Football Creditors Rule. This seems to have some basis in law as well- HMRC challenged it but lost in Court. This puts Football Creditors right to the top of the queue, but I suspect the situation has improved for HMRC albeit not to the level of top of the queue- Football Creditors, Preferential Creditors I think?
3. The Salary Cap figure that was attracting so much debate was £18m, mooted up to and around £20m at other times for the Championship- would £4.8m fly whatsoever? It's about survival but surely that would put Parachute Clubs at an insurmountable advantage in 2021/22, unless they'd be all in for it too.
4. Releasing Players- what % of their Contracts would have to be paid up?
5. All this would count against FFP, or would this be suspended for a year or 2 owing to Covid- or indeed replaced by this £4.8m Salary Cap idea.

[Yellow&Blue&Red]

If the article is accurate, it's amazing how unprofessional and unsympathetic championship clubs are making themselves look. 

Clubs that pay salaries FAR higher than they could afford in the good times, angrily and unanimously refusing to renegotiate or cap those salaries, either now or in the future. And apparently 'apoplectic' that the taxpayer won't bail them out? It's ridiculous!