The financial impact of football behind closed doors

Club legend Danny Whitaker described the loss of the club as “like the death of a family”.

146-year-old Macclesfield Town F.C. have been expelled from the National League after being wound up by the high court due to being £500,000 in debt. Many clubs could end up the same situation due to the coronavirus pandemic.

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The Prime Minister recently announced that the planned return of spectators to sports venues from October 1st could be on hold for sixth months due to fears of the second wave of Coronavirus.

The lack of matchday revenue represents a larger share for lower league clubs than Premier League clubs.

Last season, Manchester United had 52,000 season ticket holders so a high percentage of matchday income was already earned, which means the lack of matchday income wasn’t as much of a problem as it would be to a League Two club like Plymouth Argyle.

Plymouth had 2,300 season ticket holders which is 20% of their matchday crowd, so they suffered massively from the lack of matchday revenue and will continue to do so in during the 2020-21 season.

Due to lower league clubs not having high broadcasting fees or global sponsorships, they must rely on local backing and businesses which will also have their own problems due to the outbreak. Therefore, lower league clubs miss out on matchday income and sponsors, making them far more exposed than Premier League clubs and have little margin for error. 

Every Premier League and probably every Championship club will survive the impact of coronavirus, but lower leagues clubs might not. As a result of the outbreak, players wages could decrease and ticket prices for fans could be increased due to clubs needing money. In my opinion, this could be the catalyst for a transformational period in the game.

Ryan Sparks, the director of communications and commercial at League Two club Bradford City, gave an insight into how much money the football club could lose after the latest government update.

He said: “£300,000-£400,000 of potential matchday revenue down the drain due to the suspension of the return of fans to football games. The uncertainty is the bit that is most difficult to deal with. No one knows when we’ll be able to have fans back”.

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Ryan also said that Bradford City aren’t in a good position but are in a much better position than other football clubs in League Two. For them, this season may just be a case of surviving then kicking on in the season after when supporters are able to return to stadiums.

Rochdale are an example of another lower league club having to budget differently due to the lack of matchday income. Around £500,000 of expenditure had been earmarked for a new pitch and drainage at their Crown Oil Arena, refurbishment of the home and away dressing rooms and a new barcode ticketing entry system to the ground.

“All the money that we had set aside for that is now potentially going into paying salaries,” says David Bottomley, their chief executive.

A lifeline for lower league clubs?

Members of the Premier League are expected to impose strict terms and conditions on a support package worth up to £250 million to their lower-league counterparts.

Any rescue package is likely to be limited to underwriting lost gate receipts, with EFL clubs needing to provide clear evidence to that effect. Premier League clubs have no intention of bailing out teams already at risk of going bust before the pandemic due to poor ownership or other self-inflicted issues.

EFL Chairman Rick Parry stated that: “EFL clubs lost £50m last season as a result of playing matches behind closed doors or curtailing the season and stand to lose a further £200m in 2020/21 should we be required to play the whole season without supporters in grounds.”

Premier League clubs have already started to help lower league clubs after the Carabao Cup clash Leyton Orient vs Tottenham was called off after Leyton Orient players and staff had numerous coronavirus positive tests.

This saw Spurs gain a bye into the next round and meant that Leyton Orient lose out on £150,000 of revenue but Tottenham fans went on to buy £20,000 worth of Leyton Orient club merchandise to soften the blow.  

More of this sort of charity will be required if English football is going to survive the brutal winter ahead in one piece.

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