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Surviving the shutdown: Sports governance in the time of Covid-19

Covid-19 has thrown sports governance into sharp focus, both in the short term as governing bodies, clubs and other stakeholders seek to weather the immediate disruption and in the longer term as existing governance practices are called into question.

The most pressing short-term concern for governing bodies – and in some cases their constituent members or clubs – was whether, and how, to complete competitions still in full swing when lockdown began. We have already seen one challenge to a governing body’s authority to determine the league season in South Shields FC v The FA.[1] While the arbitral panel sided with the FA in this case, given the huge financial implications associated with promotion and relegation, it’s unlikely to be the last such challenge.

Going forward, the central challenge for most sporting stakeholders will be the massive impact of coronavirus on sporting revenues – from the delay or cancellation of matches, tournaments and leagues to the potential withdrawal of anticipated sponsorship revenue. Sports organisations were early adopters of the various measures of government support on offer – including the furlough scheme, government loan schemes and the deferral of tax liabilities. But in all likelihood, the toughest times still lie ahead as these measures of support are withdrawn.

Taking football as an example, financial sustainability in the current climate is a critical concern – particularly outside the Premier League. Leagues One and Two – and to a certain extent the Championship – are heavily dependent on matchday receipts. If football is likely to be played behind closed doors for some time to come, without clubs finding new revenue streams, they may struggle to survive. Even prior to the pandemic, average wages in the Championship were 107% of revenues, according to a report by Deloitte.[2]

Regulators will need to act decisively to give as many clubs as possible the best chance to survive. UEFA has already relaxed its FFP rules as a result of the pandemic[3] – and various leagues will need to follow suit. While temporary measures will be necessary, regulators should not miss this opportunity to address more fundamental governance concerns. FFP in its current form did not save Bury[4]; rules must strike the right balance between encouraging genuine investment, while protecting clubs from taking on unsustainable liabilities.

Stakeholders at all levels of sports governance will be challenged like never before in the coming months. A radical and decisive response will be necessary to ensure that our sporting landscape survives the current crisis – and there will undoubtedly be winners and losers.


[2] [3]