The future of lower league clubs across the country could be in jeopardy as the prospect of several fan-free months becomes an increasing reality.
Damien Collins MP has warned that we may only have “a few weeks to save football in this country as we know it”, calling for a government-backed rescue package for clubs in financial distress to help prevent them following in the footsteps of Bury FC.
It is thought that within the next few weeks as many as ten football league clubs could go bust, a fate that could be accelerated if clubs are made to play out the rest of the season.
A letter addressed to culture secretary Oliver Dowden along with the FA and the Football League outlines a six-point plan to address this which would provide both financial stability as well as laying the foundations for long-term sustainability.
Crucially, it includes measures to force clubs to behave like the social institutions they are, rather than a rich man’s plaything, by moving gradually towards a German model where communities own 50 per cent of their local club.
Calling for action, Collins said: “We may have only a few weeks to save professional football in this country as we know it.
“The shock of the Covid-19 crisis has badly exposed the weak financial position of clubs in the EFL, many of whom were already on the edge of bankruptcy.
“If nothing is done to provide financial support to football, clubs woth old and famous names will most certainly go into administration within weeks”.
Today I'm writing to @OliverDowden @DCMS, the @FA and the @EFL, supported by 18 MPs, 2 former FA chairs, the @WeAreTheFSA and the Chair and co-owner of 2 EFL clubs calling for urgent talks to address the financial crisis facing football, based on our six point plan ⚽ pic.twitter.com/JYImF2UmTC— Damian Collins (@DamianCollins) May 28, 2020
“Fans have a key role to play in football governance and ownership models”
Malcolm Clarke, chair of the FSA, added: “The necessary restrictions arising from the COVID-19 pandemic have made government support for football clubs – a vital part of our communities and culture – an urgent necessity. We welcome the call for that assistance to be both prompt and linked to future sustainability.
“Football now has a unique opportunity to reset and adopt new ideas, which not only secure the short-term future of clubs, but help them thrive in the seasons ahead.
“These proposals would be a huge step in the right direction and chime with the FSA’s core beliefs – that fans have a key role to play in football governance and ownership models.
“The idea of an independent unit, embedded within the FA, which exists to protect clubs is an idea we’ve championed for some time. It receives our full support.”
In their open letter, the six-point plan advocates…
• A ‘Football Finance Authority’ (FFA) scheme should be created by the Football Association – but working with and backed financially by the government – to provide financial assistance to EFL clubs.
• Funds should be provided by the FFA to allow clubs to meet their short-term liabilities and provide them enough breathing space to restructure their finances, but couldn’t be used to invest in recruiting new players or improving the club’s infrastructure. Rather than being offered as loans, these funds would instead be exchanged for a minority shareholding in the club, of between 10 per cent to 49 per cent, depending on the level of investment required and the value of the club.
• Independent directors would be appointed to the boards of clubs as representatives for this minority shareholding. These directors can be nominated by either a registered Supporters Trust or by the relevant local government authority, but they must be non-political and subject to approval as ‘Fit and Proper’ by the FFA.
• These Independent Directors shall have real-time access to the financial records of their club and can report their concerns back to the FFA. Clubs that continue to trade outside the rules of the EFL would be put into a form of administration by the FFA, where a credible plan would be implemented by independent auditors to bring the financial affairs of the club back in line with the League’s rules.
• Either a recognised Supporters Trust or a local authority can subsequently acquire the FFA shareholding in their club at a discount to market value, and funds raised in this way would be returned to the government to help repay the public investment in this scheme.
• The EFL’s financial regulations should be set and enforced by the FFA, the governing body of which should include representation from the EFL, the Professional Footballers Association (PFA), the Football Supporters Association (FSA) and the clubs themselves, but with an independent majority.
Read more about “A way forward for football” here.