English Government Lends a Hand to EFL Clubs Hit Hard by the Coronavirus Crisis

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The Government will underwrite a new body to prevent clubs in the English Football League from suffering a coronavirus pandemic, a new report says.

Earlier this month, EFL Chairman Rick Parry warned that 71 clubs in his competition were facing a collective € 200 m cash hole by the end of September.

This was mainly due to a loss of matchday revenue and uncertainty as to when or if supporters might be able to return next season.

A Digital, Culture, Media and Sport (DCMS) spokesperson even said: “We are in regular, ongoing discussions with the EFL and other football authorities on the impact of coronavirus, how the professional game could safely return and how the wider football family could be supported.”

The PA news agency understands clubs in League One and Two have been sent proposals for a salary cap.

Clubs in League Two are heading towards a cut in the 2019-20 season due to the cost of continuing to play without supporters in attendance and the Covid-19 check.

Parry said such a cap was “absolutely essential” when he addressed MPs at a DCMS committee hearing earlier this month.

Charlie Methven and Damian Collins created a roadmap called ‘A Way Forward for Football.’ It sets out a six-point strategy, which involves the establishment by the Football Association of the Football Finance Authority (FFA), financially sponsored by the Government, of funds to keep clubs affected by the pandemic afloat.

An independent director, appointed by a registered supporter’s trust or local government authority, will join the club’s board of directors to represent that shareholding and, at some stage in the future, either the supporters’ trust or the local authority will be entitled to obtain a market value discount shareholding.

Rather than a loan, the report further states, these funds will be exchanged for a minority shareholding of up to 49%. The money should only be used to cover short-term commitments and build a breathing space to restructure finances rather than to hire players or develop infrastructure.

Without the reforms of the governance of football finances, any bailout for clubs will be a short-term fix,” Methven and Collins wrote. “Once the pressure is off, the rules – whatever they are – will be bent and challenged by the owners of clubs intent on short-term success, at the cost of medium-term sustainability.”

Methven is the co-owner of League One side Sunderland and Collins is a former chairman of the DCMS Committee

Former FA chairman Lord Triesman said: “Damian Collins and Charlie Methven have clearly devoted considerable thought to the financial and social crises facing football.

“They have identified some very practical routes through to a more secure future and I welcome this wholeheartedly. It is a pity that football so seldom does the work needed itself. But it doesn’t. This is, therefore, an especially important intervention.”

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