Date: 14th April 2020 at 3:50pm
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COVID-19, more commonly known as the Coronavirus, has disrupted almost every aspect of ordinary life. Naturally the most important areas – healthcare and the economy – have gotten the most attention, but millions of fans around the world have found a gaping hole in their lives where sports used to be. The effect on football has already been dramatic, and fears are growing that – should the current suspension be significantly extended – it could become catastrophic for many clubs.

Much of the media focus so far has fallen on the likes of Liverpool and Spurs for their furlough-related gaffes. The impact, though, has been and will be much more severe on smaller clubs. In this article, we’ll explain how the already-sizable gap between the elite clubs and those below might grow even wider.

The Nature of the Problem

Both the Premier League and EFL have been suspended. No games are being played, and even training during this time period is severely limited. Although both have previously given provisional dates for their return, the truth is that – like the rest of us – the powers-that-be in football have no idea when the current pandemic will end, and when football will actually come back.

All clubs rely on three basic income methods: broadcasting, commercial (sponsorship deals, advertising, etc.), and matchday. Right now, they’re getting little-to-no money from the latter two, and it’s uncertain what will happen to the pre-agreed broadcasting money. Even if the government helps to shoulder the burden, some wages still need to be paid to both the playing and non-playing staff for as long as this continues. Many clubs are opting to defer these payments… but they’re going to get the bill sooner or later.

The longer this situation goes on, the worse it gets for every side. The severity of that impact, though, will be disproportionately harsher for certain tiers of teams.

How Might It Increase the Gap?

Even the Premier League clubs who might struggle from the suspension, like Burnley, can at least look forward to lucrative broadcasting revenues when football finally begins once more. EFL clubs don’t have this luxury. Rather, their biggest source of potential income is developing talent, and selling it on for a massive profit. Struggling Hull City, for example, signed Jared Bowen as a youth player for free, then managed to rack up £20million in January by selling him to West Ham.

The bigger teams will be taking a financial hit from all this too. In turn, this will mean less money going down to smaller teams. They simply won’t be as willing to splash out on new players, preferring to stick with what they have until the financial picture becomes clearer. This trickle-down effect will then progress through the entire Football League structure. At best we might see less Cinderella stories next year, which will also affect the bookies’ betting trends. At worst, a number of sides may end up going into administration.

Overall, the rich certainly won’t get richer from this situation… but the ‘non-rich’ are going to suffer much more.

Why Does This Hit Smaller Clubs Harder?

As noted, the current suspension is bad for all parties. That said, some clubs are in a significantly better position to weather it than others.

This does not simply refer to which league a team is in. Premier League side Burnley, for example, have been overachieving from a financial point of view for years; the projected £50million loss they’d incur if the 2019/20 season was simply cancelled could be crippling. By contrast, Championship sides like Leeds, Preston and Stoke have extremely wealthy owners, who should be able to help their clubs weather the storm.

Thus, when we talk about the suspension hitting ‘smaller clubs’ harder, this does not necessarily mean a Premier League vs EFL situation. It refers simply to the financial stability of the club, whether that be its cash balance, ownership situation, the size of its fanbase, the size of its stadium, and so on. Support for clubs below the Premier League has already been offered, but – for those without a massive financial safety net – it’s completely unclear whether this will be enough to see them through.

 

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