[Football] Tax Payer funding for EFL cubs.

Lenny Rider · Sep 27, 2020

No doubt a number of the usual suspects will disagree but it’s something in the last few days I’ve discussed with a number of football supporting friends.

There’s talk of Government bailouts, ie taxpayers money, as EFL clubs enter financial meltdown connected with the Covid Pandemic, but should the state really prop up businesses that weren’t run properly before Covid?

A plethora of clubs have lived beyond their means for years, chasing success they couldn’t simply afford, regardless of Covid is it right they they get help in front of other businesses that did operate within their means before the pandemic?

As a tax payer I have no qualms with financially viable football clubs being helped at this time, but would you rather see HM Government help Debenhams survive rather than an effectively insolvent championship club with a huge wage bill they couldn’t really afford prior to lockdown?

LamieRobertson · Sep 27, 2020

Lenny Rider said:
No doubt a number of the usual suspects will disagree but it’s something in the last few days I’ve discussed with a number of football supporting friends.

There’s talk of Government bailouts, ie taxpayers money, as EFL clubs enter financial meltdown connected with the Covid Pandemic, but should the state really prop up businesses that weren’t run properly before Covid?

A plethora of clubs have lived beyond their means for years, chasing success they couldn’t simply afford, regardless of Covid is it right they they get help in front of other businesses that did operate within their means before the pandemic?

As a tax payer I have no qualms with financially viable football clubs being helped at this time, but would you rather see HM Government help Debenhams survive rather than an effectively insolvent championship club with a huge wage bill they couldn’t really afford prior to lockdown?

To take your example ...Has Debenhams been run properly for the last say five years...it’s been a basket case for a while now...the viability of the ‘High Street’ was an issue before Covid came along

Furlough wasn’t ‘viability’ tested....in fact it helped pay lower league club wages

Sounds like a fence position..but I’m going for joint responsibility and no money to Debenhams

beorhthelm · Sep 27, 2020

any help from government would have to be around keeping the core club afloat, i.e. not a hand out for players wages. not going to wash otherwise. i can see some HMRC NI/tax holiday as a means to help clubs. in terms of numbers, football doesnt really employ many so it would look odd to spend billions when other industries are not directly supported.

BHAFC132 · Sep 27, 2020

They should use the PL teams money to fund the lower clubs

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maffew · Sep 27, 2020

No easy answer, theres so many parameters. To me football club bailouts are fairly low down the list whilst there is no wage caps and the bulk of expenditure appears to be spend on a fairly small number of peoples wages.
Priority for tax payers money should be aimed to help the many not the few so genuine and viable companies in short to mid term trouble with more employees jobs at risk.

edna krabappel · Sep 27, 2020

Funding the cubs?

Maybe we could lend them some scouts.

Lenny Rider · Sep 27, 2020

LamieRobertson said:
To take your example ...Has Debenhams been run properly for the last say five years...it’s been a basket case for a while now...the viability of the ‘High Street’ was an issue before Covid came along

Furlough wasn’t ‘viability’ tested....in fact it helped pay lower league club wages

Sounds like a fence position..but I’m going for joint responsibility and no money to Debenhams

Maybe Debenhams wasn’t the right example

, but I’m sure you get my drift.

Would you help save Theatre Land in London, which generates over £10.5billion to the economy, and arguably runs within its means by the fact that any show that isn’t viable gets hooked, over some of the poorly run domestic football clubs?

AmexRuislip · Sep 27, 2020

Lenny Rider said:
No doubt a number of the usual suspects will disagree but it’s something in the last few days I’ve discussed with a number of football supporting friends.

There’s talk of Government bailouts, ie taxpayers money, as EFL clubs enter financial meltdown connected with the Covid Pandemic, but should the state really prop up businesses that weren’t run properly before Covid?

A plethora of clubs have lived beyond their means for years, chasing success they couldn’t simply afford, regardless of Covid is it right they they get help in front of other businesses that did operate within their means before the pandemic?

As a tax payer I have no qualms with financially viable football clubs being helped at this time, but would you rather see HM Government help Debenhams survive rather than an effectively insolvent championship club with a huge wage bill they couldn’t really afford prior to lockdown?

A no to Debenham, perhaps the FA could fork out to help the clubs that are genuinely in trouble.

LamieRobertson said:
To take your example ...Has Debenhams been run properly for the last say five years...it’s been a basket case for a while now...the viability of the ‘High Street’ was an issue before Covid came along

Furlough wasn’t ‘viability’ tested....in fact it helped pay lower league club wages

Sounds like a fence position..but I’m going for joint responsibility and no money to Debenhams

When Debenhams started having difficulties, a new 'flagship' store opened in Watford, with a new look and new ideas, including a restaurant and Costa Coffee within.
A knee jerk reaction IMO, where its now closed, with all those jobs lost.
Should've diverted that money in helping other employees :thumbsup:

beorhthelm · Sep 27, 2020

Lenny Rider said:
Would you help save Theatre Land in London, which generates over £10.5billion to the economy, and arguably runs within its means by the fact that any show that isn’t viable gets hooked, over some of the poorly run domestic football clubs?

comparison with theatre land is interesting because away from the head line shows in large theatres, its heavily reliant on grants and fund raising. similar to football, its not truly profitable case by case basis, only on a industry wide view.

Eeyore · Sep 27, 2020

I try to look at our own situation and rationalise it.

Here at the Albion we have been living well beyond our means for years.

We just have a rich benefactor.

Many of those clubs do their best in a tough business environment. I suspect it's not that many who recklessly try to live the dream.

NooBHA · Sep 27, 2020

Lenny Rider said:
Maybe Debenhams wasn’t the right example ��, but I’m sure you get my drift.

Would you help save Theatre Land in London, which generates over £10.5billion to the economy, and arguably runs within its means by the fact that any show that isn’t viable gets hooked, over some of the poorly run domestic football clubs?

Indeed. And there are all the other small live music venues which are folding. Add to that. All the Touring Musicians and Bands who have had absolutely Zilch help in the last 6 months.

What we need is better Benefits to individuals whilst they are unable to work.

What the Government is doing is artificially keeping Unemployment numbers down by paying employers to pretend that employees are still working. When they are effectively unemployed.

The position we are in is massively falsified. And although the Furlough system has been a massive help to Employers and individual employees.However I really feel for the people who will be thrown on the scrap heap when Government Assistance ends.

The Government is just so reluctant to to get a robust efficient Benefits system in readiness for the inevitable.

Weststander · Sep 27, 2020

The difficulty I have in government (us) borrowing being increased by £100m’s for EFL clubs, is that some are undeserving imo.

Derby and Massive cheated by injecting multi £10m’s of owners money (on a different level to TB, who always played by FFP), to buy and remunerate players they could not have bought without the cheating. In essence, they have Magic Money Trees. Why should they get one penny of public money, beyond furlough?

Then I’m undecided whether the public should be funding this or the PL.

LamieRobertson · Sep 27, 2020

Lenny Rider said:
Maybe Debenhams wasn’t the right example , but I’m sure you get my drift.

Would you help save Theatre Land in London, which generates over £10.5billion to the economy, and arguably runs within its means by the fact that any show that isn’t viable gets hooked, over some of the poorly run domestic football clubs?

I do get your drift

...how well run are some of the theatres ..does it matter because of their cultural importance? (I get your point re shows being hooked)

Free market economy says let the weak fail....we have seen clubs go to the wall ...but not nearly as many as one would have expected if they had been in a different business sector.

Its a hard one isn’t it when you see clubs still paying huge transfer fees and high salaries....and then fans wanting their club to spend big bucks on a striker or whatever...then you think why should tax payers money help? But we really are talking about further down the football pyramid ...how do you work out what’s a viable club or not? You quote x billion contributed by theatre land...football itself in whatever guise is a massive contributor to the economy and local community.

I think we all thought that Back before project restart that Covid would be an opportunity for football to sort itself out....not happened has it....lower league clubs rely massively on gate income and the spin offs from that ..government/ Covid has now denied them any such income for the foreseeable.

As said above I’m not sure how you sort out the viable from the non...so I’ll go back to my earlier post ..it has to be a joint effort from football and the government in my opinion

e77 · Sep 27, 2020

I suspect bailouts for an industry that pays some of it's employees several hundred pounds a week is a difficult sell. I know that it Premier League level and we are discussing Football League but that is the public perception.

I believe the PL are looking into a bailout to the FL which is probably the way forwards but that does mean Brighton (or Crystal Palace or Burnley) will be giving money to clubs historically roughly at the same level such as Derby and Middlesborough. As some as these clubs haven't been well run it has to come with conditions attached.

At some stage the top earners in the game are going to have to play their part and take a wage cut. There needs to be a deal done with government so the money stays in the game so it doesn't become a case of millionaires giving money to billionaires but I don't think footballers being on 100k a week or more is sustainable in the current climate.

Lenny Rider · Sep 27, 2020

LamieRobertson said:
I do get your drift

...how well run are some of the theatres ..does it matter because of their cultural importance? (I get your point re shows being hooked)

Free market economy says let the weak fail....we have seen clubs go to the wall ...but not nearly as many as one would have expected if they had been in a different business sector.

Its a hard one isn’t it when you see clubs still paying huge transfer fees and high salaries....and then fans wanting their club to spend big bucks on a striker or whatever...then you think why should tax payers money help? But we really are talking about further down the football pyramid ...how do you work out what’s a viable club or not? You quote x billion contributed by theatre land...football itself in whatever guise is a massive contributor to the economy and local community.

Like yourself I had hoped this would make football press the reset button, and it hasn’t, yet, but I think ultimately it will be forced to.

I’m not up on the legalities but I think effectively a lot of contracts will have to be ripped up and start again.

Wages will go down, hopefully to under the £100,000 a week for the big earners, and those who don’t want to accept that will probably migrate to China or the League that’s paying the most.

Ultimately, on a positive note, it could mean in 3/5 years time more British players in the top flight than we’ve seen in the last 20 years.

Neville's Breakfast · Sep 27, 2020

beorhthelm said:
any help from government would have to be around keeping the core club afloat, i.e. not a hand out for players wages. not going to wash otherwise. i can see some HMRC NI/tax holiday as a means to help clubs. in terms of numbers, football doesnt really employ many so it would look odd to spend billions when other industries are not directly supported.

I see where you are coming from but football clubs would simply spend any tax holiday on player wages and transfers. I would only support state subsidy if clubs were taken into public ownership and forced to operate on a completely balanced budget.

Herr Tubthumper · Sep 27, 2020

I have thought about this myself. I have long felt football needs to take a long hard look at itself and maybe now is the moment.

My thinking is we should let the free market decide who survives and who doesn’t. But, any club which fails can reform and regain its current league status. But, and a big but, to regain its current league status it must reform as a “community club”. Maybe it can get tax-payers money at this point.

I’m not sure exactly what my community club status will entail but fan owned is a start, maybe follow the 50+1 model. Restrictions on finances maybe another area. My plan will also need to ensure previous owners can’t exploit it. Under my model, I also think the more clubs which go bust, the better. Imagine if all 92, or whatever it is at the moment, went bust; we’d have a competition which is much more level and run with sustainable financing. Obviously this won’t happen but this extreme example demonstrates why more is better.

I feel my idea will help lower league clubs who are genuinely struggling but also turn badly run clubs over to the fans.

beorhthelm · Sep 27, 2020

Neville's Breakfast said:
I see where you are coming from but football clubs would simply spend any tax holiday on player wages and transfers. I would only support state subsidy if clubs were taken into public ownership and forced to operate on a completely balanced budget.

that would be on the club then. a holiday would only defer liability so not a subsidy, the crucial point being HMRC not petitioning to windup half the professional clubs this winter.

studio150 · Sep 27, 2020

How wide does any assistance go.

While we are focused on football clubs, I'm sure there would be calls from Cricket, Rugby (both forms) and other sports, as well as the arts that has already been mentioned.

Perhaps one way of the Government assisting, is to provide loans to clubs who wish to be assisted, but there are strings attached to the loan, in the interest rate is based on division and wages to turnover ratio, so that the higher up the league system, and the higher wages to turnover ratio the higher the interest rate. Plus some form of restriction on transfer fees paid, such as 20% of the transfer fee paid goes to the Government, or reducing the outstanding loan.

This would hopefully avoid any Government funds to be used directly on squad improvement.

dejavuatbtn · Sep 27, 2020

BHAFC132 said:
They should use the PL teams money to fund the lower clubs

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To be honest they should have done this from the outset of the PL, rather than trying to make it a closed shop for the few and sentencing the rest to obscurity.

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