Last Tuesday, EFL clubs decided to end Leagues One and Two causing teams to be either promoted or relegated based on a points-per-game basis. The framework was proposed to clubs by the English Football League which was to bring an end to the 2019/20 campaign due to the outbreak of coronavirus.
Consequently, promoting Coventry City, Rotherham United, Swindon Town, Crewe Alexandra and Plymouth, while, relegating, Tranmere Rovers, Bolton Wanderers and Southend United. Stevenage could be relegated but is yet to be confirmed as Macclesfield Town could receive points reduction for alleged breaches of EFL regulations. Playoff dates for promotion contenders is still to be confirmed.
The use of points-per-game can be deemed controversial as not everyone agrees with the process. Peterborough’s club of football, Barry Fry, describes the framework a “disgrace”. He says, “It’s Mickey Mouse. There’s so many clubs in League One that could have gone up. I cannot understand how the EFL has come up with this solution and, most of all, I cannot believe so many clubs voted for PPG to end the season because it’s so, so unfair. We had one of the division’s best records at home and five of our remaining nine games were at home, seven of which were against bottom-10 clubs.”
But what does this mean for other professional clubs?
Yesterday, in a club statement, Tranmere Rovers announced approximately 20 members of staff have been informed that their positions will be made redundant from the end of July. The statement goes on to say, "With no prospect of an early return to football in front of paying crowds, the Club's income streams are hugely reduced, potentially into 2021."
"As a consequence, the Club has made this incredibly difficult decision with a very heavy heart to ensure the Club's financial security during these unprecedented times."
This may not come as a surprise as clubs among the lower divisions of professional football are more likely to experience financial hardship compared to the higher excellence of the Premier League. However, on the same day Leagues One and Two was decided to be cut, Everton’s CEO, Denise Barrett-Baxendale, released a club statement.
"The Board of Directors, together with our manager, his backroom team, the nine members of the Club’s Executive Leadership Team and other senior staff, voluntarily agreed at the very start of this crisis to reductions and deferrals in salary of up to 30%. Those Club personnel have been supported by the First Team squad, who have voluntarily agreed to deferrals of up to 50% for the next three months."
According to a report by business analysts Vysyble, Premier League Clubs made a combined £600m loss, in the 2019/20 season, considering the 20-top flight clubs made a record revenue in excess of £5bn combined. The report found that only in two seasons, 2016/17 and 2017/18, the league made a collective profit. With the return of Premier League football expected on the 17th of June, clubs will have to accept the fact that they will be unable to make matchday revenue from ticket sales as fans are not allowed inside the grounds for the foreseeable future.
Roger Bell, a director of Vysyble says, “The Covid-19 virus is not the cause of football’s financial distress. It is merely the accelerant on what our data has very clearly and very correctly identified as a much longer-term problem.”
“With record losses at club level for 2018/19 and just 36 per cent of Premier League clubs achieving an annual economic profit since 2009, the perception of the Premier League as ‘football’s richest division’ is clearly challenged.”
Deloitte predict Premier League clubs are set for a loss of £1bn is revenue from this season due to the coronavirus pandemic. This is a consequence of the loss of supporters enabling clubs to generate matchday revenue - something which is vital to clubs in the lower divisions of the Football League.
Author: James Parker