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Money, Money, Money

With the news having broken that emergency financing for non-league football has now, without negotiation or warning, moved from being a grant to now being a repayable loan, I thought I’d put down my observations on the overall state of finances in the National League and below. With the u-turn by the Government, who are removing the £11m grant, the future of football is now very much at risk.

 

Initially, the Government announced a rescue package of £300m of emergency funding for sports impacted by the absence of spectators because of coronavirus. Both rugby codes and horse racing were amongst the beneficiaries, but not clubs in football’s Premier League or the English Football League. The breakdown of funding distribution was estimated as: Rugby Union: £135m, Rugby League £12m, horseracing: £40m , football: £28m – National League (steps 1-2): £11m; National League (steps 3-6): £14m.

 

Firstly,why the disparity between Rugby and Football? Football is by far the biggest sport in the world, with many more participants and a massive profile. This isn’t an attack on rugby by the way, the variety of sport available to British sports fans and players is part of who we are as countries that make up the United Kingdom. However, given the number of spectators that watch football compared to rugby it makes it difficult to understand why the amount awarded was so much larger.

Secondly, the distribution of the funds, specifically at National League steps 1 & 2. I must say, having been a Director at Wrexham AFC for over 9 years, that the National League management has left a lot to be desired over the years, with the upper echelons of the decision makers appearing very much self concerned rather than taking the altruistic view of their membership. For example, the resistance to the introduction of Financial Fair Play, which applies across the vast majority of football, but not in the National League has made these leagues a happy hunting ground for hobbyist owners who want to buy a quick path to the EFL, and you see teams with no history or even a fan base basically buying the League by paying inflated wages to bring in players who shouldn’t be playing at this level. This, in the case of my team, has led to the end of fans ownership, as, although the Club is financially sound and very well supported, the only way of regaining EFL status is to sell the Club to those with money enough to support the ambitions we have.

 

The way the National League board distributed the first tranche of funding was also questionable. Teams with little support recieved exactly the same amount as those with a much larger fan base. In effect, this destroyed the budgetting that the clubs with larger incomes put in place, as those budgets were built on estimates of crowds in favour of poorly supported clubs who gained funds inproportionate to their original budgets.The fact that some of the owners of these smaller clubs were on the Board that voted through this form of distribution is a pause for thought, not that I’m ever suggesting self interest. Given the uproar that a lot of clubs raised when this format of distribution was put in place, I have no doubt that this influenced the Government’s decision to offer the latest tranche as loans rather than grants.

 

So what happens now? Well, we’ve already seen that steps 1 & 2 have suspended playing for two weeks whilst details become clearer. I have the expectation that the National League senior teams will also follow this plan, as there is no way any club will take on funding as a loan with no income to pay off that loan, and no certainty as to when football will resume.And with out any form of income, a great number of clubs will undoubtably fold.Simple economics. Talking about simple economics, even shutting down these clubs will result in costs to Government for furlough payments etc., estimated to be in the region of £14m, exceeding the proposed funding. Can you see any logic in forcing clubs out of business and actually paying to do that? I know I can’t, but that is apparently the way we are heading unless the Government again do a U-turn.

 

For those fans of real football who are lucky enough to have their teams playing today, enjoy the moment, there is a good chance this is your last taste of your team until September at the earliest, and possibly forever.

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