Football League facing financial apocalypse with £20m lost per MONTH after Boris Johnson’s latest Covid-19 ba
LOWER division clubs are facing financial apocalypse after Prime Minister Boris Johnson signalled fans may not be back in grounds all season.
The PM told the House of Commons that plans to re-open turnstiles from October 1 have been put on hold in the battle to hold back a deadly second wave of Covid-19.
But his warning that the new measures are likely to be in place for “six months” or more leaves football on the brink of a catastrophic crisis.
EFL chairman Rick Parry has already stated that the 72 clubs anticipate a £200m black hole if crowds do not return.
That means £20m in lost income per month.
Championship clubs are slightly bolstered by receiving £7m per season in television and “solidarity” payments from the Premier League.
But the majority of clubs in Leagues One and Two shut down in March and have had no gate income since.
Parry fears that the fight to keep all 72 clubs going is reaching a critical stage and the latest announcement will make that even more stark.
The EFL chairman explained last week: “We do need rescue packages and we're hoping that by securing rescue packages, we can secure the future of our clubs.
“Our aim is to keep every single one of them alive.”
Parry conceded in May that “cost controls” were necessary throughout the football pyramid, especially in the EFL.
He revealed to MPs that Championship wages represented 106 per cent of aggregate turnover, with the figures in Leagues One and Two “80 to 90 per cent” and that “tough, big decisions” were required.
Since then, clubs the two lower tiers have agreed salary caps of £2.5m in League One and £1.5m in League Two, although these have been challenged by the PFA.
But clubs were anticipating and relying on the return of fans to help them pay their way.
Last weekend saw seven pilot tests allowing up to 1,000 spectators at grounds across the three divisions.
With the extension of that scheme now stopped dead and the likelihood of the gates being barred for the rest of the season, the real danger of clubs going bust and folding has intensified.
Tranmere chairman Mark Palios admitted: “It’s not entirely a surprise, but it is going to be a devastating blow for an industry that’s already been really struggling.
“There were a lot of things that made the football industry unique and a lot of clubs were already having financial difficulties before this pandemic started and this may sadly tip some of them over the edge.”
The Prime Minister announced this afternoon
Premier League chiefs have voiced their frustration at the Government’s push-back that will mean fans cannot return to grounds next month.
The 20 clubs are losing up to £25m in collective income from every round of games without supporters, with a total of £700m going absent last season alone.
League bosses calculated the local and national economy is missing out on £200m in spending each Prem match round that fans remain locked out, with clubs losing £100m a month.
A Prem spokesman said: “We are disappointed that the safe return of supporters to matches has been postponed.
“The Premier League is certain that, through League-wide guidelines and a code of conduct developed with scientific experts and agreed by the Government’s Sports Ground Safety Authority, fans in stadiums will be as safe or even safer than at any other public activity currently permitted.
“This is already evident in other European leagues.”
It continued: “Football is not the same without attending fans and the football economy is unsustainable without them.
“Last season, Premier League clubs suffered £700m in losses and at present, our national game is losing more than £100m per month.
“This is starting to have a devastating impact on clubs and their communities.”