Football clubs in Leagues One and Two are on the brink of disaster, and must start playing again as soon as possible.
So says football finance expert Gerald Krasner, the former chairman of Leeds United, in the 2020 Football Distress Report, produced by insolvency specialist Begbies Traynor.
The report states that just five of the 71 EFL clubs were in financial distress before the coronavirus lockdown, but that has all changed with the huge impact of the season suspension, which means teams haven’t played since March 7.
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Krasner claims the suspension has created a financial crisis and that for clubs’ survival the EFL must resume playing matches, behind closed doors, as soon as possible to avoid long-term disaster for the sport.
It has previously been estimated that it would cost £700,000 for clubs in the lower tiers to play out their fixtures behind closed doors - but Krasner believes there are wider issues at stake.
He explained: “We’re unlikely to see the wealthy clubs in the Premier League succumb to profound financial distress as long as they continue to be bolstered by large television revenues. But what is absolutely essential, especially for the EFL clubs, is that they finish the season by playing the remaining matches behind closed doors.
“The reality is that people have managed without football for more than a month now and there’s a real danger that unless the momentum can be regained and fans can begin to watch matches on TV again, the impetus will be lost and the draw of football will be diminished in the long term. If that was to happen, the television money would soon desert the game too.”
The EFL board are meeting today to discuss the potential cancellation of the season, but Krasner says that would be a mistake.
He added: “With rigorous testing and as much social distancing as is practical, there is no reason why the season shouldn’t restart in the first week of June, with two televised matches a week scheduled, so that it concludes by the end of July. The new season could then kick off with a delayed start.”
Krasner says that, while Premier League clubs are financially secure enough to ride out the crisis, those in the Championship and below are in a much worse position due to their reliance on the revenue created by ticket sales and match day spending, with as many as half a dozen in Leagues One and Two in danger of collapse.
Indeed, he believes that could, in the long term, change the face of football - with fans having more power.
“Invaluable income for EFL clubs, which receive a far smaller proportion of their revenue from broadcasters, has traditionally been generated by the hire of stadiums and facilities for corporate and other uses, but that will also have been wiped out by social distancing requirements,” Krasner said.
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“Like with so many other sectors of the economy, a new business model is required for football if it is to survive. Nobody knows what that looks like yet but it looks set to change the landscape of the game.
“Fans are likely to be asked to dig deep and contribute even more to their clubs, but in turn that could give them more say in, and control over, how their clubs are run.”
Krasner added: “Unfortunately those clubs with wealthy foreign owners may not necessarily be immune from disaster either. Overseas owners will be forced to respond to the effects of the global pandemic on their own finances and business interests, and for some that could mean that ownership of an English football club is simply no longer viable.”
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