Premier League to bail out EFL clubs

[phantom]

Just agreed that the Premier league are to provide "Rescue package and distress fund" with £50m grants to League 1 and 2

There will also be a £200m interest free loan available to Championship clubs

 

[CyderInACan]

https://www.bcfc.co.uk/news/efl-statement-rescue-package-agreed/

The EFL and the Premier League have today concluded negotiations on a rescue package and distress fund to address the immediate financial challenges faced by EFL clubs arising as a result of the Covid-19 pandemic.

A fund of £50m in the form of a grant and monitored grant payments has been agreed for League One and Two clubs while the Premier League will provide a further financial commitment to assist the EFL in securing a £200m loan facility that Championship clubs will be able to utilise interest free.

Premier League clubs have given their final approval to the agreement at today’s (Thursday, December 3rd 2020) shareholder meeting and this followed earlier approval of the deal by the EFL Board, acting on behalf of its membership.

EFL Chair, Rick Parry, said: “Our over-arching aim throughout this process has been to ensure that all EFL clubs survive the financial impact of the pandemic.  I am pleased that we have now reached a resolution on behalf of our clubs and as we have maintained throughout this will provide much needed support and clarity following months of uncertainty.

“I would like to thank Richard Masters and Gary Hoffman for their efforts on behalf of the Premier League, and of course their shareholders, for making this welcome, tangible commitment to the professional game at a time when it has needed it most.”

Richard Masters, Premier League Chief Executive, said: “The Premier League is a huge a supporter of the football pyramid and is well aware of the important role clubs play in their communities. Our commitment is that no EFL club need go out of business due to Covid-19.

“All football clubs continue to suffer significant financial losses as a result of the pandemic, but Premier League Shareholders today unanimously agreed to provide additional funding and support for EFL clubs in real financial distress.

“We are very pleased to have reached this agreement and we stand together with the EFL in our commitment to protect all clubs in these unprecedented times.”

 

[phantom]

Breakdown confirmed as:

League one clubs will receive a grant of £375k each, and league two clubs £250k each, immediately

There is then an additional grant of £15m to cover lost gate receipts - each club to appeal for funds.

Then another £20m grant is available to league one and two clubs that can give evidence of needing additional funds to survive

Money will only be loaned to clubs that can prove they are sustainable and that funds will go directly into club and not to agents / owners etc

Championship clubs will each receive an £8.5m interest free LOAN to be repaid by June 2024 using solidarity receipts

[Mr Popodopolous]

That's good news on the face of it. 

I hope that at Championship level the bailout is tied to certain financial reforms (to which we can add parachute payments).

I guess LOANS rather than straight up cash or grants is useful in terms of keeping Championship clubs in a bit more of a prudent mindset.

"LOAN to be repaid by June 2024 using solidarity receipts". 

Interesting bit. Are they front loading/advancing solidarity money or is it a case that it might taper off if needed in order to repay loans as they fall due?

[Davefevs]

2 hours ago, Mr Popodopolous said:

That's good news on the face of it. 

I hope that at Championship level the bailout is tied to certain financial reforms (to which we can add parachute payments).

I guess LOANS rather than straight up cash or grants is useful in terms of keeping Championship clubs in a bit more of a prudent mindset.

"LOAN to be repaid by June 2024 using solidarity receipts". 

Interesting bit. Are they front loading/advancing solidarity money or is it a case that it might taper off if needed in order to repay loans as they fall due?

Looks like an advance of solidarity payments....which is fair enough.  Start re-working your income forecasts Finance people.

[Tipps69]

So forgive my ignorance on this but what’s the chances that we now see the likes of Derby, Wednesday, Forest, Reading (amongst others) splashing the cash in January on transfers because they have this money available to them or is it restricted for what it is to be used for?

This has been my biggest fear because I’m sure our club will act in the best interests of the club whereas I’m less than sure of that being the case with a few other Championship clubs.

[Davefevs]

26 minutes ago, Tipps69 said:

So forgive my ignorance on this but what’s the chances that we now see the likes of Derby, Wednesday, Forest, Reading (amongst others) splashing the cash in January on transfers because they have this money available to them or is it restricted for what it is to be used for?

This has been my biggest fear because I’m sure our club will act in the best interests of the club whereas I’m less than sure of that being the case with a few other Championship clubs.

Worth noting that clubs will probably be submitting future year FFP submissions with the current cycle, then they’ll have to show reduced incomes in those years too.

Pretty much that if you have losses of £5m plus (that’s covers 90% of champ clubs) you have to submit projected years P&Ls too.  So of course they can spend it but they might be put under embargo, etc as a result.

[Tipps69]

3 minutes ago, Davefevs said:

Worth noting that clubs will probably be submitting future year FFP submissions with the current cycle, then they’ll have to show reduced incomes in those years too.

Pretty much that if you have losses of £5m plus (that’s covers 90% of champ clubs) you have to submit projected years P&Ls too.  So of course they can spend it but they might be put under embargo, etc as a result.

Which was kind of my fear! For me, this money should be used to keep clubs from going out of business, paying debts. Not on transfers & ridiculous wages, especially when there are undoubtedly people out there that have been made redundant by these clubs & companies that are owed money from these clubs.

It should be used to survive, not to gamble on a club’s future as far as I’m concerned!

[Davefevs]

10 minutes ago, Tipps69 said:

Which was kind of my fear! For me, this money should be used to keep clubs from going out of business, paying debts. Not on transfers & ridiculous wages, especially when there are undoubtedly people out there that have been made redundant by these clubs & companies that are owed money from these clubs.

It should be used to survive, not to gamble on a club’s future as far as I’m concerned!

I don’t disagree....question becomes how do you do that fairly?

[wayne allisons tongues]

1 hour ago, Davefevs said:

Looks like an advance of solidarity payments....which is fair enough.  Start re-working your income forecasts Finance people.

Only problem I see is if you get a loan and are relegated how are you going to pay it back. Solidarity payments drop hugely between championship  and L1 and will only have 3 years to pay it back. Would Wycombe or Rotherham as an example risk getting the loan and then not having the funds to pay it back.

[Davefevs]

4 minutes ago, wayne allisons tongues said:

Only problem I see is if you get a loan and are relegated how are you going to pay it back. Solidarity payments drop hugely between championship  and L1 and will only have 3 years to pay it back. Would Wycombe or Rotherham as an example risk getting the loan and then not having the funds to pay it back.

Just pop the money into a business savings account and leave it there, earning a nominal amount of interest.  In Wycombe’s case that’s probably what they’ll do....sensibly run club.  Probably Budgeted for relegation anyway.

Many businesses outside of football have taken the government’s bounce back loans and haven’t spent any of the money.  Just a safety blanket.

[Lanterne Rouge]

7 minutes ago, Davefevs said:

Just pop the money into a business savings account and leave it there, earning a nominal amount of interest.  In Wycombe’s case that’s probably what they’ll do....sensibly run club.  Probably Budgeted for relegation anyway.

Many businesses outside of football have taken the government’s bounce back loans and haven’t spent any of the money.  Just a safety blanket.

I did but haven`t had to touch it yet. That could change overnight though so it`s a safety net as you rightly say.

[wayne allisons tongues]

8 minutes ago, Davefevs said:

Just pop the money into a business savings account and leave it there, earning a nominal amount of interest.  In Wycombe’s case that’s probably what they’ll do....sensibly run club.  Probably Budgeted for relegation anyway.

Many businesses outside of football have taken the government’s bounce back loans and haven’t spent any of the money.  Just a safety blanket.

I believe you can’t pop it into a savings account, you have to prove that you need the money. If you don’t need it and PL don’t think you need it you won’t get it.

[Tipps69]

1 hour ago, Davefevs said:

I don’t disagree....question becomes how do you do that fairly?

You get their creditors to bill the Premier League for the money owed & they pay them direct!

Anyone stupid enough to give money directly to Derby & Wednesday (& probably a few others) in particular will get what they deserve! Millions of pounds missing!

[Davefevs]

1 hour ago, wayne allisons tongues said:

I believe you can’t pop it into a savings account, you have to prove that you need the money. If you don’t need it and PL don’t think you need it you won’t get it.

I’m only going on what @phantom posted above.  No idea what the qualifying terms are.

 

34 minutes ago, Tipps69 said:

You get their creditors to bill the Premier League for the money owed & they pay them direct!

Anyone stupid enough to give money directly to Derby & Wednesday (& probably a few others) in particular will get what they deserve! Millions of pounds missing!

I think it’s more complicated than that.  I like the principle though.

[Tipps69]

21 minutes ago, Davefevs said:

I’m only going on what @phantom posted above.  No idea what the qualifying terms are.

 

I think it’s more complicated than that.  I like the principle though.

No reason for it to be, creditors send bill to club, club forward contact information of creditors & bill on the FA. FA confirm details with both parties, bill gets paid & money is deducted from what the club is allowed to borrow.

[Davefevs]

20 minutes ago, Tipps69 said:

No reason for it to be, creditors send bill to club, club forward contact information of creditors & bill on the FA. FA confirm details with both parties, bill gets paid & money is deducted from what the club is allowed to borrow.

What if a club can afford to pay its creditors?  Should they be allowed to use the money to boost their squad?

[ExiledAjax]

2 hours ago, Davefevs said:

businesses outside of football have taken the government’s bounce back loans and haven’t spent any of the money

Yep I know of at least three small businesses that have done just this

[Tipps69]

39 minutes ago, Davefevs said:

What if a club can afford to pay its creditors?  Should they be allowed to use the money to boost their squad?

No they shouldn’t, this fund should solely be used to for debt management (ideally from a result of the pandemic, not long standing debt but I guess that would be difficult to prove) in my opinion.

[Davefevs]

18 minutes ago, Tipps69 said:

No they shouldn’t, this fund should solely be used to for debt management (ideally from a result of the pandemic, not long standing debt but I guess that would be difficult to prove) in my opinion.

So any club who uses this support package ought to go into a transfer embargo (of sorts)? 

[Tipps69]

12 minutes ago, Davefevs said:

So any club who uses this support package ought to go into a transfer embargo (of sorts)? 

Not necessarily, I have no issue with them bringing in free transfers or players that they would of signed regardless of getting these funds but how could it be acceptable for a Derby or a Wednesday (amongst others) to suddenly spend £5m+ on a player & not stand to get punished? Assuming that spending that wouldn’t of taken them over the FFP threshold.

Especially if after January, clubs then turn around & say they can’t afford to pay creditors, players or staff! Despite blowing a load on new players!

We heard throughout the initial lockdown & since that dozens of clubs would be looking at going into receivership without financial help! So that help should be used for that purpose, not for clubs to go out on a shopping spree!

[Davefevs]

54 minutes ago, Tipps69 said:

Not necessarily, I have no issue with them bringing in free transfers or players that they would of signed regardless of getting these funds

how do you police that?

but how could it be acceptable for a Derby or a Wednesday (amongst others) to suddenly spend £5m+ on a player & not stand to get punished? Assuming that spending that wouldn’t of taken them over the FFP threshold.

this is the difficulty.  This is why I’d have liked to have seen the EFL use the predictive accounts as some form of basis to base FFP allowances  / grants / loans.

Especially if after January, clubs then turn around & say they can’t afford to pay creditors, players or staff! Despite blowing a load on new players!

don’t disagree, hence why some form of embargo, even one in one out type approach, or you can sign players but not increase the wage Bill....I’m sure there are better ideas.

We heard throughout the initial lockdown & since that dozens of clubs would be looking at going into receivership without financial help! So that help should be used for that purpose, not for clubs to go out on a shopping spree!

anecdotally, Lg1/2 clubs more at risk, but some Champ clubs admittedly.

For me I think owners / investors should be able to cover COVID losses.  Hence the use of predictive accounts, e.g. you were gonna be £5m over ffp because of lost income....you’re allowed to invest £5m to bring your house in order....and that would cover the creditor issues.

I’m not trying to be awkward, I just think it’ll be a nightmare to put a fair set of rules in place to use the funds....hence why I think they’ve gone with a blanket approach. Comments above

[Tipps69]

25 minutes ago, Davefevs said:

I’m not trying to be awkward, I just think it’ll be a nightmare to put a fair set of rules in place to use the funds....hence why I think they’ve gone with a blanket approach. Comments above

First time for everything

It just doesn’t sit comfortably with me, knowing that clubs are going to take the piss! But then it also wouldn’t sit comfortably with me if City spent a large amount on new signing(s), knowing that 6 months ago or so we made 40 staff members redundant while then spending x amount on new player(s) plus their astronomical wage(s) (compared to that of those who were made redundant)! 
This is the best opportunity we have to restructure the ridiculous spending that has gone on in football for decades & there has to be a thought to the rest of society!

I also have a worry about how much ticket prices are going to rise once all of this pandemic stuff is done, so these clubs can grab back their losses & cover their debts while still spending fortunes on players & I don’t believe the majority of clubs are ready to fall into line anytime soon & if that happens, I’ll be tapping out as I’m sure others will & they can get used to playing in front 2000 fans every week now!

I would of preferred this loan to of come with a 10% interest rate rather than interest free, then clubs would of only used it if it was necessity rather than feeling like they have free money to blow for 3 or 4 years & then the interest could of been donated to companies/people that really need it.

It just feels like very little good is going to come out of this! And clubs will carry on believing that they can waste money & someone will always be there to give them more!! Well I hope these clubs don’t come round with the money buckets when it all eventually catches up with them because they can **** off!! I’m sick & tired of people/clubs thinking they deserve something from everyone, no matter what they do!

See, this is what happens when you try not being awkward @Davefevs

[Davefevs]

4 minutes ago, Tipps69 said:

First time for everything

It just doesn’t sit comfortably with me, knowing that clubs are going to take the piss! But then it also wouldn’t sit comfortably with me if City spent a large amount on new signing(s), knowing that 6 months ago or so we made 40 staff members redundant while then spending x amount on new player(s) plus their astronomical wage(s) (compared to that of those who were made redundant)! 
This is the best opportunity we have to restructure the ridiculous spending that has gone on in football for decades & there has to be a thought to the rest of society!

I also have a worry about how much ticket prices are going to rise once all of this pandemic stuff is done, so these clubs can grab back their losses & cover their debts while still spending fortunes on players & I don’t believe the majority of clubs are ready to fall into line anytime soon & if that happens, I’ll be tapping out as I’m sure others will & they can get used to playing in front 2000 fans every week now!

I would of preferred this loan to of come with a 10% interest rate rather than interest free, then clubs would of only used it if it was necessity rather than feeling like they have free money to blow for 3 or 4 years & then the interest could of been donated to companies/people that really need it.

It just feels like very little good is going to come out of this! And clubs will carry on believing that they can waste money & someone will always be there to give them more!! Well I hope these clubs don’t come round with the money buckets when it all eventually catches up with them because they can **** off!! I’m sick & tired of people/clubs thinking they deserve something from everyone, no matter what they do!

See, this is what happens when you try not being awkward @Davefevs

Believe it or not I totally agree.  Some clubs will abuse it, some will desperately need it (genuinely), some clubs will gain an advantage through it.

I hope we get a financial reset through covid, I think we did get a small one in the previous window...but I’m not sure how far it will go.

[Tipps69]

20 minutes ago, Davefevs said:

Believe it or not I totally agree.  Some clubs will abuse it, some will desperately need it (genuinely), some clubs will gain an advantage through it.

I hope we get a financial reset through covid, I think we did get a small one in the previous window...but I’m not sure how far it will go.

Will a reset not just allow clubs to flout the rules again?

[Mr Popodopolous]

Ha post from Sheffield Wednesday forum. Rather different perspective it must be said!

If this is broadly accurate, it should ease fears of clubs using it stupidly.

Quote

Have you read the small print. There is no £200m it is a guarantee for clubs and the EFL to go and get loans. 

 

it's not free money like league 1 and 2, it has to be repaid by 2024 and club won't get it to pay players wages or to buy players.

 

Basically R Party and the Premier League are trying to screw the Championship teams.

 

the sickening part is some of the 24 teams could be close to going bust, but the Premier league will still spend £500m on transfers in January.

Needs to be policed correctly of course. Perhaps clubs should also have to prove their need, provide evidence and business plans.

I don't believe the 2nd bolded bit btw- the 1st bolded bit? Shouldn't be used for it, certainly nothing new in any case.

[Mr Popodopolous]

About to read this article, gives more detail- apology if already covered, not really looked at it much myself yet.

https://www.dailymail.co.uk/sport/sportsnews/article-9013913/Premier-League-set-FINALLY-agree-bailout-EFL.html

[Mr Popodopolous]

This snippet reassures me- should reassure you as well @CyderInACan @Davefevs @Tipps69

Quote

Support for Championship Clubs 

The Premier League has also agreed to provide a payment commitment of up to £15m to cover interest, arrangement fees and professional fees to allow the EFL to secure a £200m loan facility that it will then on-lend to Championship clubs interest free. 

The loan facility is provided to support clubs in the Championship to meet PAYE liabilities up to the end of 30 June 2021.

Loans are capped at £8.33m per Championship club with monies received to be repaid by June 2024 using Premier League solidarity receipts or other central Premier League or EFL Distributions.

This fund is not available to any club in breach or suspected breach of EFL regulations and clubs will again need to submit evidence in their applications to club eligibility.

Any club in receipt of a loan payment as detailed will be required to continue to maintain compliance with the EFL's financial regulations.

 

 

[Loco Rojo]

So what's the catch?  I wonder what the clauses are that the PL have put in the to deal to make sure they're the winners from this bailout and clubs outside of the Premiership are going to get shafted longer term (if they survive).  I cannot believe for one second this is a simple interest free loan.

[Tipps69]

5 hours ago, Mr Popodopolous said:

This snippet reassures me- should reassure you as well @CyderInACan @Davefevs @Tipps69

 

 

Brilliant, now let’s just hope a few certain clubs don’t get creative with their accounting again!! And that whoever is controlling this fund does just that & controls it!

I’m still very sceptical.