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Club Bailouts
Discussion started by JonnyL (IP Logged), 24 September, 2020 10:32
JonnyL
JonnyL
24 September, 2020 10:32
Interesting discussion on Talksport this morning talking about financial help for lower league clubs that face going to the wall due to fans not being allowed back in to the grounds.
What was basically said for those that didn't hear it was that the EFL is in discussion on how to finance rescue packages for clubs. The indication was that this would not come from the government and the Premier League would not be able to finance any support either.

One of the options put forward appears to be an American Hedge fund offering 200 million to the EFL to support clubs, the Premier League would fund the interest payments and the TV money for the EFL would pay the money back.

The government would step in to save clubs only after this rescue package has failed.

No idea if this is likely to happen in reality but the situation in the lower leagues is such that they were saying at least 10 clubs will go to the wall by November and because of this the EFL are having to act quickly to get something in place.

pez
pez
24 September, 2020 10:40
Quite simply, the whole population is under threat of losing their jobs.

Why should football be given a special deal?

There's thousands of small businesses struggling to pay their workers.

Any bail out schemes should be made available to all businesses, not just football.

If everyone were to lose their jobs, then nobody would be able to afford to attend matches long after this pandemic subsides.

I know lots of clubs will no doubt go under, but the welfare of the entire nation is at stake here, not just the football community.

Bored rover
Bored rover
24 September, 2020 10:46
If the FA find a fund a rescue ten happy days but the taxpayer should jot rescue a sports club. Ultimately if a team is approaching bankruptcy then they can terminate the players contracts and sign up players on-a free deal i.e local players. If your level then becomes Non league north south or lower then thats what it is. After all its about having the club and clubs that are strong at heart will bounce back.

MESSAGES->author
Doogie'sGhost
24 September, 2020 12:57
I would have an issue with this I think. From what I understand, there would be a bailout fund available for clubs in dire need, which is fine. It would be financed by the EFL through effectively getting an advance on its TV income (not great, but possibly necessary). The EFL would then distribute as necessary (fine). However if the EFL has to pay it back this would mean reduced prize moneys and TV monies to all clubs presumably. So the better run clubs get penalised even if they don't need any bailout and are therefore effectively subsidising the financially unstable clubs. Yet again, it seems, the clubs who throw money around get an advantage over those that live within their means. This might be wrong, of course, but that seems the suggestion here.

Bored rover
Bored rover
24 September, 2020 13:31
Quote:
Doogie'sGhost
I would have an issue with this I think. From what I understand, there would be a bailout fund available for clubs in dire need, which is fine. It would be financed by the EFL through effectively getting an advance on its TV income (not great, but possibly necessary). The EFL would then distribute as necessary (fine). However if the EFL has to pay it back this would mean reduced prize moneys and TV monies to all clubs presumably. So the better run clubs get penalised even if they don't need any bailout and are therefore effectively subsidising the financially unstable clubs. Yet again, it seems, the clubs who throw money around get an advantage over those that live within their means. This might be wrong, of course, but that seems the suggestion here.

So it pretty much matches the furlough scheme then funded by those that haven't had a 6 month paid holiday

MESSAGES->author
Phil65
24 September, 2020 14:33
Quote:
Bored rover
Quote:
Doogie'sGhost
I would have an issue with this I think. From what I understand, there would be a bailout fund available for clubs in dire need, which is fine. It would be financed by the EFL through effectively getting an advance on its TV income (not great, but possibly necessary). The EFL would then distribute as necessary (fine). However if the EFL has to pay it back this would mean reduced prize moneys and TV monies to all clubs presumably. So the better run clubs get penalised even if they don't need any bailout and are therefore effectively subsidising the financially unstable clubs. Yet again, it seems, the clubs who throw money around get an advantage over those that live within their means. This might be wrong, of course, but that seems the suggestion here.

So it pretty much matches the furlough scheme then funded by those that haven't had a 6 month paid holiday

You mean fully paid up taxpayers who continue to pay tax whilst furloughed.
Not sure they're worthy of vilification for circumstances beyond their control and something that is not by choice.
They're also living in genuine fear of job losses, living on reduced income with a negative impact on mental health being prevalent; "punishment" enough for their "crime" wouldn't you say.
I've been lucky enough to be able to continue to work, funding these extensive "holidays", but have family members who are furloughed and are desperate to be back in work. I'll pass on your compliments to them and I'll take it on the chin from them on your behalf.
These are desperate times for many and I think a little more sensitivity is in order.

Uptonrover
Uptonrover
24 September, 2020 15:21
Bail outs for clubs annoy me to be honest. You had the likes of Leicester who basically played the system and got a lovely new stadium for next to nothing and won the Prem. Wolves who only in August accepted a fine from uefa for overspending and have at the time of counting spent just over £73 million in this transfer window (so far). Your telling me wolves will be bringing in upwards of £73 m this season?? And then theres our old “friends” Bolton who always seem to wriggle out of their mess

EgoEgoEgo
EgoEgoEgo
24 September, 2020 15:23
Quote:
Doogie'sGhost
I would have an issue with this I think. From what I understand, there would be a bailout fund available for clubs in dire need, which is fine. It would be financed by the EFL through effectively getting an advance on its TV income (not great, but possibly necessary). The EFL would then distribute as necessary (fine). However if the EFL has to pay it back this would mean reduced prize moneys and TV monies to all clubs presumably. So the better run clubs get penalised even if they don't need any bailout and are therefore effectively subsidising the financially unstable clubs. Yet again, it seems, the clubs who throw money around get an advantage over those that live within their means. This might be wrong, of course, but that seems the suggestion here.

And there’s the rub! Live within your means, be prudent, act responsibly and plan for the unforeseen and then be penalised. While others don’t and plead poverty, shout about how unfair it is, kick up a stink and expect to be saved. Beware of EFL men starting to talk about the “bigger picture” and the “greater good”.

greasbyrover
greasbyrover
27 September, 2020 18:43
Listening to the government minister on Andrew Marr show earlier, the government will not be offering any bail out money to EFL clubs. They are actively encouraging the PL to provide the support instead.

pc1968
pc1968
27 September, 2020 19:36
You might say why should the premier league clubs help out the smaller clubs ?
There is no obligation ....no actual link between the clubs
But it seems they can certainly afford to do so
I think Manchester United are currently trying to add a player to their squad and attempting to negotiate a price under £90m .....that would be enough to keep the whole of league two going for a whole season ....probably more than enough

The gap between the premier league and the rest is just incredible

You hear the phrase “football community” .........really ?

I personally don’t think the premier league clubs actually care what happens outside their elite group .....whether that is right or wrong is open to debate

Of course some small clubs have only themselves to blame for being in financial difficulties ....spending far beyond their means in a hell or bust approach to achieve promotion
But I would say the majority are now struggling through absolutely no fault of their own and I’m sure we all agree tranmere are in that group

Any help from premier league clubs may only happen as a result of being forced to .....it could well be begrudgingly given and the fear is it has strings attached .....loans to be repaid by a certain date ...and if you don’t there are serious consequences

Worrying times

mrGr33n13
mrGr33n13
27 September, 2020 20:00
Only nine premier League clubs made a profit last year.

Liverpool have been smashing records for their revenue yet only made 40m profit

Given theymmade 84milkion from matchday revenues they aren't in the best position to be propping up the pyramid when they have no fans. And Liverpool are one of the most profitable clubs.

For me bail outs benefit poorly run clubs. Teams over spending already impose costs on the rest of the division. They bid up wages for all, they wrap up the best players, and rivals have poorer results. That those clubs will be at the front of the queue for grabbing Paul pogbas wage or whatever barmy scheme they are going to demand just cements that.

Theres no reason for clubs to need bailing out. They should simply cut their biggest expense by making players redundant.

People often say footballers are paid more than nurses, but that is not true.

The vast majority of people who play 46 football games a year are amateurs. And they pay the fa for the privilege.

So clubs could actually charge people to play for them and they'd be able to field a side.

They'd be dogshite, but hey ho.

Ultimately players are going to have to accept that full time pro football might not be possible for a while, esp if you play for a club that pays out 110% of its revenue on wages, like all the championship for example

Aldo'smuzzy
Aldo'smuzzy
27 September, 2020 23:20
Football is awash with money and the government is right to expect football to address the financial problems it's facing. Taxpayers can't be expected to cover this.

In exchange for being allowed to complete 19/20, the EPL gave a commitment to help the wider football family. It hasn't yet done so because, as I understand it, the EFL hasn't made clear what it's needs are.

Government is working with football to encourage, influence, cajole it to finalise a solution, hopefully this week.

But be sure the EPL won't be doing this entirely out of charity or sense of duty to the wider game. It'll want something in return. This could have a big sting in the tail - for example, it was only a few months ago that Ashworth at Brighton was suggesting the B team idea, or nursery clubs idea, as a trade off for greater EPL funding.

mrGr33n13
mrGr33n13
27 September, 2020 23:33
Football is awash with money, but also debt.

So much income simply goes to wages, just look at the championship where clubs spend an average of 107% of turnover on wages

Players will have to take a hit, they are the biggest expense.

The cost of footballers at the margin is negative as people will play for free and even pay money to play

No way should gov bail out any club, and the prem are precarious also.

Cloth will have to be cut according to circumstance.

Aldo'smuzzy
Aldo'smuzzy
28 September, 2020 00:19
Players are already seeing wage deflation and that'll continue. And btw, for all the praise Jacko has received over his recruitment, I reckon our increasing financial strength (if only stability) relative to many other clubs has already been a significant factor in bringing in the players we have.

But, even with the big correction that's heading football's way, professional players are a long way off turning semi pro in vast numbers, and semi pros are a long way off paying subs to play.

mrGr33n13
mrGr33n13
28 September, 2020 07:02
Yah I do feel that bailouts will happen.

I am off the opinion that they shouldn't and they benefit clubs that have already imposed costs on others by overspending.

That should come with risk, and the risk is that clubs that weaken themselves financially end up dropping down the leagues as they can no longer afford the wages.

The idea that football / government / etc should be subsidising clubs to spend 90 - 150% of income on wages is repellent. It will benefit poorly run clubs, again.

Aldo'smuzzy
Aldo'smuzzy
28 September, 2020 08:00
Quote:
mrGr33n13
The idea that football / government / etc should be subsidising clubs to spend 90 - 150% of income on wages is repellent. It will benefit poorly run clubs, again.

Yah, which is presumably why nobody's suggesting it and why it won't happen.

Bored rover
Bored rover
28 September, 2020 08:34
PL are clubs are suggesting a 250m take or leave bail out according to media. Stipulation you must prove your loss of income and the extent of it.

MESSAGES->author
Doogie'sGhost
28 September, 2020 08:57
Quote:
mrGr33n13
Yah I do feel that bailouts will happen.
I am off the opinion that they shouldn't and they benefit clubs that have already imposed costs on others by overspending.

That should come with risk, and the risk is that clubs that weaken themselves financially end up dropping down the leagues as they can no longer afford the wages.

The idea that football / government / etc should be subsidising clubs to spend 90 - 150% of income on wages is repellent. It will benefit poorly run clubs, again.
I don't think I've ever agreed with any of your posts to the extent I do this one. Football clubs are entertainment businesses. All businesses that are ambitious about growth have a degree of debt. It is necessary to invest and grow more successful. But that debt comes with a risk and has to be managed in a sustainable and mature way. Debt in football, by many, is seen as a magic money tree and something to be gambled away, along with 10 other similarly desperate punters on the chance of finding that golden ticket. And of course the real problem, even if you find that golden ticket, is that you have to gamble even more just to stand still after. The rewards might get bigger at each step but so do the risks. Everyone deserves an equal proportion of the blame. Players, owners and fans. Yes, even the fans who lose their clubs. We've ridden the roller coaster and know what the down side is like. We damn near crashed twice. Yet still, after a couple of poor results, half this forum is urging the Palii to get their cheque books out and get some newer, better, more expensive players. It's not a big step from that to Bury and Macc.

mrGr33n13
mrGr33n13
28 September, 2020 09:08
Quote:
Bored rover
PL are clubs are suggesting a 250m take or leave bail out according to media. Stipulation you must prove your loss of income and the extent of it.

let's put this into some context

only 9 clubs made a pre tax profit last year. that proftit amounted to 250m

so the premier league are giving up every last penny of pre tax profitability. as a group they lost around 400m last year.

the wage bill in the championship alone is around 790m. the premier league cannot afford to even prop up the division below it. the money is not going to touch the sides and will be hoovered up by over ambitious, reckless wage bills

the clubs at the front of the queue will be the ones who have imposed the highest costs on rivals and yet again will find that the only consequence they face is financial assistance.

crazy

mrGr33n13
mrGr33n13
28 September, 2020 09:14
Quote:
Doogie'sGhost
Quote:
mrGr33n13
Yah I do feel that bailouts will happen.
I am off the opinion that they shouldn't and they benefit clubs that have already imposed costs on others by overspending.

That should come with risk, and the risk is that clubs that weaken themselves financially end up dropping down the leagues as they can no longer afford the wages.

The idea that football / government / etc should be subsidising clubs to spend 90 - 150% of income on wages is repellent. It will benefit poorly run clubs, again.
I don't think I've ever agreed with any of your posts to the extent I do this one. Football clubs are entertainment businesses. All businesses that are ambitious about growth have a degree of debt. It is necessary to invest and grow more successful. But that debt comes with a risk and has to be managed in a sustainable and mature way. Debt in football, by many, is seen as a magic money tree and something to be gambled away, along with 10 other similarly desperate punters on the chance of finding that golden ticket. And of course the real problem, even if you find that golden ticket, is that you have to gamble even more just to stand still after. The rewards might get bigger at each step but so do the risks. Everyone deserves an equal proportion of the blame. Players, owners and fans. Yes, even the fans who lose their clubs. We've ridden the roller coaster and know what the down side is like. We damn near crashed twice. Yet still, after a couple of poor results, half this forum is urging the Palii to get their cheque books out and get some newer, better, more expensive players. It's not a big step from that to Bury and Macc.

totally the difference in attitude between us 10 years ago when we were crowd soucing money to fund loanees, trying to buy shares to prevent unsuitable owners and investing in match day facilities and bury fans who lapped up players on championship wages whilst they cantered to promotion out of the bottom tier is, well the difference between the status of the clubs now.

only fans can protect clubs. don't look to the efl.

had johnson cashed in the money we owed to him we'd have been a bury. we took our moonshot and were veery lucky that our benefactor decided he wanted zero return. i'm not sure i'd like that ambition without assurances, again.

mrGr33n13
mrGr33n13
28 September, 2020 09:22
club a

aim for a top third budget and look to get ahead through clever acquisition, good coaching and a solid base that means that any cup money can be reinvested and also means in the event of relegation they can afford to run a loss for a couple of years before they have to slash expenditure. no fans means they will have to cut community projects and delay investing in infrastructure. but they have budgeted for no fans and will be ok

club b

spend 99% of income on wages. they bid up wages in the division, monopolise proven talent and if they get promoted the bonuses that they would have to pay may well cripple them and without fans they won't be able to fulfill their fixtures unless they lay off the most expensive players.

who is the first in line for bailout funding?

get out of here lol.



Edited 1 time(s). Last edit at 28/09/2020 09:23 by mrGr33n13.

Bored rover
Bored rover
28 September, 2020 10:34
Quote:
mrGr33n13
Quote:
Bored rover
PL are clubs are suggesting a 250m take or leave bail out according to media. Stipulation you must prove your loss of income and the extent of it.

let's put this into some context

only 9 clubs made a pre tax profit last year. that proftit amounted to 250m

so the premier league are giving up every last penny of pre tax profitability. as a group they lost around 400m last year.

the wage bill in the championship alone is around 790m. the premier league cannot afford to even prop up the division below it. the money is not going to touch the sides and will be hoovered up by over ambitious, reckless wage bills

the clubs at the front of the queue will be the ones who have imposed the highest costs on rivals and yet again will find that the only consequence they face is financial assistance.

crazy

Its not about their business model though is it, its about the lack of gate receipts. Owners are entirely permitted to run a high risk business model and pay high wages. This does does not mean they should not be supported through loss from lack of gate receipt.

It is not for anyone on here to preach to any owner how they should or shouldn't models their business. Im sure some owners and many fans would question MPs model.

There is no right or wrong way whatever your personal feeing simply choice.

And its not fair to any fans to loose their club due to Covid.

Aldo'smuzzy
Aldo'smuzzy
28 September, 2020 10:39
Some seem to be conflating badly run clubs and inherently unsustainable business models with a serious but short term interruption to what, fundementally, will remain a very viable professional industry post covid.

Any funding solution won't give the former a free pass, but will facilitate the latter.

mrGr33n13
mrGr33n13
28 September, 2020 11:37
I don't foresee there being any sustainability criteria other than the closer to the edge you are the more likely you are to receive EPL money.

If it were the case that funds were a proxy for using markets for short term capital id be much more receptive.

As is I suspect it will merely be the squeekiest wheels getting the grease

Tom Bombadil
Tom Bombadil
28 September, 2020 11:49
Just put them on the ever growing list of "we've had it worse than everybody else the government should give us money"

Stop press the Rugby Union Players Association have just gone on the list.



Edited 1 time(s). Last edit at 28/09/2020 12:32 by Tom Bombadil.

bedfordave
bedfordave
28 September, 2020 14:02
Football has a very weak case. Manny is on six figures I believe and nearly every club above us stats that wouldn't let any government go anywhere near. As for the Championship, a basket case of businesses lol
Clearly EFL stuffed up by not investing in ifollow and it is unfortunate that our 3,000 customers are not let in- it would be safe. We are where we are though.
Never have clubs of our size been less important to the game. PL run industrial sized non-first team squads albeit many foreign born. Warwick used to say he would pick up a rough diamond that had just missed out over the water, and to be fair millions came in down the road from iconic young players. That potential is no longer there
Now the best we can hope for is minor sales to a bit further up the ladder. Our last two were experienced players under contract who got bought, not even our own bred. So we are wheeling and dealings not producing?
PL would seriously need an imagination to think we are worth saving for their own good. Never say never but when will sell someone for half a million again.
I'm confident we won't fold first, I doubt anyone will want to own up first and I suspect the clubs will act away from the EFL in unison and soon


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