”National League clubs are in the perfect storm” - how coronavirus could push non-league teams to the edge

The impact of coronavirus is putting the top of non-league football in a critical situation, according to football finance expert Kieran Maguire.
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All National League games have been suspended until April 3, but that date could well be extended as the coronavirus pandemic gets worse.

National League clubs are due to convene for a meeting on Tuesday to thrash out what happens next.

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Maguire, a senior teacher in accounting and finance at the University of Liverpool Management School, thinks a prolonged spell out of action could put some non-league clubs under unbearable strain.

FC Halifax Town v Ebbsfleet United.  National League. The MBi Shay Stadium.
14 March 2020.  Picture Bruce RollinsonFC Halifax Town v Ebbsfleet United.  National League. The MBi Shay Stadium.
14 March 2020.  Picture Bruce Rollinson
FC Halifax Town v Ebbsfleet United. National League. The MBi Shay Stadium. 14 March 2020. Picture Bruce Rollinson

“I think it’s critical to a certain extent,” he said. “The clubs are reliant on cash flow to pay the bills.

“There’s only so long you can keep the wolf from the door.

“National League clubs are in the perfect storm of things that can go wrong in the sense that they don’t have the solidarity payments from the Premier League, they don’t have a TV deal which pays anything like what you’ll get as a League Two club.

“But then you’ve got the overheads, and some National League clubs will have wage budgets which are bigger than those clubs at the bottom of League Two.

FC Halifax Town v Ebbsfleet United.  National League. The MBi Shay Stadium.
14 March 2020.  Picture Bruce RollinsonFC Halifax Town v Ebbsfleet United.  National League. The MBi Shay Stadium.
14 March 2020.  Picture Bruce Rollinson
FC Halifax Town v Ebbsfleet United. National League. The MBi Shay Stadium. 14 March 2020. Picture Bruce Rollinson
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“How are clubs going to fund the essential costs. Clearly you can’t sell any players at this time of year, so you are therefore reliant on funding.

“But a bank isn’t going to lend money to a football club, they will take one look at it and say ‘we don’t know when your next money is coming in, we’re not going to lend to you’.

“So it either comes down to the club owners or the fans putting together some form of crowdfunding. But of course many of the fans will be worried about their own futures if you’re working part-time or in the gig economy, your income disappears because the hospitality sector and the tourism sector is chopped off at the knees.

“I think clubs have a huge problem ahead of them, so it’s down to the owners or it’s down to the fans.

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“If the owners have their own businesses, which are also struggling, the last thing they can afford to do is put money into the football club because they’ve also got responsibilities towards their other staff.”

When asked how much money will clubs at the top of non-league could lose during this time, Maguire said: “Talking to people in charge of League One and League Two clubs, a small club like Rochdale estimate to get around £50,000 per home match.

“I suspect Halifax might be half that. Even so, if you’re looking at £20,000 to £25,000 a match, and you’ve got four or five home games scheduled, £100,000 has just disappeared off your income.

“Nobody can magic £100,000 from somewhere. Some costs will be cut because they won’t be employing stewards, burger stall staff or people like that, but these folks aren’t on big money to begin with so they won’t be saving large amounts.

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“There will be peripheral savings like heating and lighting costs because staff will be working from home.

“But it’s going to be a huge concern.”

Maguire says football clubs aren’t immune to the financial hardships that other businesses are experiencing because of coronavirus.

“Unless we get an indication as to a return to football in a relatively quick period, and personally I can’t see that, then it does really worry me because ultimately, you survive in business based on your cash flow.
“When you don’t know when your next pound is going to be generated, how can you continue in business?

“Laura Ashley has gone bust as a result of the virus, and that’s a much bigger institution than a local football club.

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“The travel industry has been destroyed to a certain extent, so I can’t see why football clubs would be exempt from that.”

Should the richest and the wealthiest in football help out those further down the pyramid in their hour of need?

“I think it would be a fantastic gesture. I don’t think a lot of fans realise that the majority of the clubs in the Premier League are losing money.

“It’s only really the handful who are also in the Champions League that are profitable, because all the Premier League money effectively goes out on wages and transfers.

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“Arsenal have just lost £20 million, Chelsea lost over £100 million last year, there’s huge losses being incurred, but they are being bankrolled by wealthy people.

“Do I expect a Russian billionaire to put his hand in his pocket to help Halifax? No.”

One thorny issue that has been raised by the suspension of football due to the coronavirus is players contracts.

“In an ideal world, the owners of the National League clubs will all agree to extend players’ contracts until whenever the season ends,” said Maguire.

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“I think the PFA ought to advise its members to accept those contract extensions because otherwise you could get a really awkward situation where contracts do expire, matches have been unfulfilled and you’ve got a team gunning for promotion offering a two-month contract on two grand a week.

“Some clubs would be able to afford to do that, and you could find another club that’s worked hard all season, got into the play-ofs, and suddenly four or five of its players who are out of contract go elsewhere.”

“You couldn’t blame the players, they’re young men who have short careers. But sometimes the advice they are given by their agents is very short-term in nature, and everybody’s looking for a quick buck.

“That would be a shame, and I think that would damage the integrity of the sport.”

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When asked what advice he had for clubs in non-league, Maguire said: “It’s a terrible thing to say but I think you need to assess all of your expenses, go through them literally on a line-by-line basis and identify anything that can be cut because we want clubs like FC Halifax Town to be there in a year, three years, five years’ time.”