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dylanisabaddog

Several EFL clubs in trouble

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Worrying stuff, and looks to be no easy way out of it.

Gonna be a lot of lower league players out of work when contracts end on June 30th.

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I wonder how many of them have 'stage' payments due from PL clubs. I doubt very much there will be much in the way of future transfer income  this summer either.

With these clubs, gate receipts form a far greater percentage of their income than at PL clubs. If the money is not coming in through the gate then it can't go out to players bank accounts

Probably not at L1/2 level but in the championship we might see a fair few 'flash' cars returned. My heart will bleed.

I'm afraid it is going to have to be wage cuts all round, as I cannot see much else that will sort this out.

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The grounds will still be there, the players will still have their boots, the fans will want to watch footy when all this is over.....a well overdue restructuring and introduction of realism to an unsustainable model.

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2 minutes ago, Van wink said:

The grounds will still be there, the players will still have their boots, the fans will want to watch footy when all this is over.....a well overdue restructuring and introduction of realism to an unsustainable model.

That would be a superb silver lining in this rather dark cloud that is passing over us all right now Winko. Imagine, football clubs that relied more on the quality of their set up , coaching, recruitment etc rather than the wealth of their owner. I can see a very bright future for us if footy is somehow reset. 

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Genuine question. What do these elf clubs gain financially from cancelling the season now? They still have upkeep of facilities and salaries to pay. Or is it a case that if it’s cancelled that there is insurance against a cancelled season? Final league position payments that may tide them over for another month? Is it that they can release players who are under contract through a cancelled season instead of having to keep them ready for a restart?

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5 minutes ago, wcorkcanary said:

That would be a superb silver lining in this rather dark cloud that is passing over us all right now Winko. Imagine, football clubs that relied more on the quality of their set up , coaching, recruitment etc rather than the wealth of their owner. I can see a very bright future for us if footy is somehow reset. 

Maybe lower down the league pyramid. When we restart the big boys will still be the big boys.

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16 minutes ago, ricardo said:

Maybe lower down the league pyramid. When we restart the big boys will still be the big boys.

My post was wishful thinking Ricardo(o) . Im too much of a realist to expect much in the way of positive  changes. 

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10 minutes ago, wcorkcanary said:

My post was wishful thinking Ricardo(o) . Im too much of a realist to expect much in the way of positive  changes. 

It is wishful thinking, money will always be the driver, bit you can hope.

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1 minute ago, Van wink said:

It is wishful thinking, money will always be the driver, bit you can hope.

Cheers, I like being allowed to hope😉

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44 minutes ago, JF said:

Genuine question. What do these elf clubs gain financially from cancelling the season now? They still have upkeep of facilities and salaries to pay. Or is it a case that if it’s cancelled that there is insurance against a cancelled season? Final league position payments that may tide them over for another month? Is it that they can release players who are under contract through a cancelled season instead of having to keep them ready for a restart?

The article concentrates on Leagues One and Two but I believe this applies to the Championship as well. As far as I know clubs do not have any insurance against the season being cancelled.

I think the advantage of  cancelling, and making the decision very soon, is that clubs can then downsize their operations financially rather than hanging on, and piling up costs they cannot afford, in the vain hope that the season can be finished.

If Leagues One and Two do cancel that potentially has implications further up the pyramid, since it is hard to see how the Championship, for example, could relegate clubs if there are no clubs coming up from One. And so on.

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2 minutes ago, PurpleCanary said:

The article concentrates on Leagues One and Two but I believe this applies to the Championship as well. As far as I know clubs do not have any insurance against the season being cancelled.

I think the advantage of  cancelling, and making the decision very soon, is that clubs can then downsize their operations financially rather than hanging on, and piling up costs they cannot afford, in the vain hope that the season can be finished.

If Leagues One and Two do cancel that potentially has implications further up the pyramid, since it is hard to see how the Championship, for example, could relegate clubs if there are no clubs coming up from One. And so on.

How much is a league one club losing by not completing the season? Is it possible at all that a league one club completing the season BCD could actually be worse off than abandoning the season due to having to pay out match bonuses etc yet getting little to no match day income?

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Newport County have furloughed the whole club from the very top right to the bottom.

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7 minutes ago, TIL 1010 said:

Newport County have furloughed the whole club from the very top right to the bottom.

The first of many I suspect. 

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Posted (edited)
12 minutes ago, TIL 1010 said:

Newport County have furloughed the whole club from the very top right to the bottom.

57 Days between us winning the title at Villa and our first day back in training on 1st July, 70 days between that match and our first pre season friendly. Pre season usually lasts what? 5/6 weeks? There have been 40 days since we played Sheffield United.

How long are these clubs going to need to get up to speed before getting back to playing again?

With the increased pressure from clubs to get this done by 30th June and the lockdown to be extended. I think the games up.

Edited by Hillhead

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Maybe the government should simply say no furloughing for football clubs and instruct the bigger clubs to look after the smaller ones in their region. In other words force the football authorities to break down the artificial barriers between PL. EFL and National League etc. to manage themselves, to cut back on pay at the top end and avoid being a leach on the taxpayer. 

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Just now, essex canary said:

Maybe the government should simply say no furloughing for football clubs and instruct the bigger clubs to look after the smaller ones in their region. In other words force the football authorities to break down the artificial barriers between PL. EFL and National League etc. to manage themselves, to cut back on pay at the top end and avoid being a leach on the taxpayer. 

I think that should be done on a county rather than regional basis 😂

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I was reading an article which stated some lower league players will be earning very little as apparently it is standard practice in the lower leagues to load the contract and salary payments at the beginning of the contract. With tapering of money towards the end of the contract. 

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5 hours ago, JF said:

Genuine question. What do these elf clubs gain financially from cancelling the season now? They still have upkeep of facilities and salaries to pay. Or is it a case that if it’s cancelled that there is insurance against a cancelled season? Final league position payments that may tide them over for another month? Is it that they can release players who are under contract through a cancelled season instead of having to keep them ready for a restart?

One would imagine that many would go into administration, players and staff would be made redundant, clubs that actually owned their grounds would see them sold, and debts incrued by many many clubs over the last few years would be paid to their creditors. Any left over will make its way back to the owners at the time the club folded. That is about all they will gain financially. And all that is now a frightening reality. 

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Most clubs are, I believe, run as standard limited companies with shareholders. When a normal business of this type runs into financial trouble there are several routes the executive can go down to attempt to re-finance/restructure, the main ones being 1) The bank 2)the existing shareholders 3) potential new shareholders, which could include standard investors/hedge funds/trade competitors etc

For a football club "business" the problem is uncertainty. No kind of restructuring can even be started without some detailed knowledge of when the income stream might restart. Whilst that uncertainty lasts, all standing costs must still be paid so the drain on cash is extreme. If the cash runs out before the restructure, administration beckons - not necessarily the disaster it sounds as it provides an end to that uncertainty, but definitely not the result that we would want because of the loss of our assets ie the players.

So, what every club will want is to be able to accurately forecast something, rather than the current situation going on and on.

If clubs have very wealthy owners who own 100% of the shares then there is only one route for that extra cash to keep going - but those wealthy owners may not want to keep throwing money in when their other assets are also being devalued. This is where Sunderland and Aston Villa found themselves a couple of years ago. I suspect a few of the individually funded Champs clubs could soon be in a similar position. Even some in L1 and L2 are individually funded (Ipswich, for example) and will depend for their existence on one or two individuals holding their nerve - but for how long?

Everything in football is financially geared to June 30th - if I was a CEO of a football club, particularly one with physical assets, I would be demanding certainty so that I could make sure administration does not become inevitable.

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Posted (edited)

I suggest that some take a look at what happened to Rangers a few years back.

This simplistic idea that the season could simply be voided rather ignores to concern that players would probably be able to walk away from clubs that go into liquidation - 3 of the above joined us at some stage.

Folks need to realise how interdependent clubs are in regard to money owed to each other - and the fear that those still with momey would be able to cherry pick players and club assets for next to nothing.

And there is very little money to be ghad by playing lower league games behind closed doors either

 - even if there were the resources to do so.

Edited by Bill

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I went for my walk a little while ago and passed the surgery of a Doctor who is a running buddy of ours. And she was leaving for lunch break. Her husband is a top breast surgeon as well so the family are medical to the bone. One of their daughters had it. No point going to hospital. Strict isolation. No test. And she is fully recovered.

But the Doctor said that social distancing has to stay for a long while, possibly but not definitely until a vaccine is not only found but used on everyone.

Football is not going to begin again unless it is behind closed doors and that is not what it is there for. OK they may televise all the Prem games but below the Championship will still struggle. And do we really think watching a game with no atmosphere is worth it? 

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3 hours ago, keelansgrandad said:

I went for my walk a little while ago and passed the surgery of a Doctor who is a running buddy of ours. And she was leaving for lunch break. Her husband is a top breast surgeon as well so the family are medical to the bone. One of their daughters had it. No point going to hospital. Strict isolation. No test. And she is fully recovered.

But the Doctor said that social distancing has to stay for a long while, possibly but not definitely until a vaccine is not only found but used on everyone.

Football is not going to begin again unless it is behind closed doors and that is not what it is there for. OK they may televise all the Prem games but below the Championship will still struggle. And do we really think watching a game with no atmosphere is worth it? 

I wish the talk (generally not you) about playing behind closed would stop.

It's just not going to happen for many many many reasons anytime soon.

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1 minute ago, Rich T The Biscuit said:

I wish the talk (generally not you) about playing behind closed would stop.

It's just not going to happen for many many many reasons anytime soon.

Just posted this in another thread but may as well put it in here as well. This is a really good piece on why behind closed doors can’t and won’t happen. It’s a sports illustrated article about American sports but it’s the same reasons everywhere 

https://www.si.com/mlb/2020/04/10/sports-arent-coming-back-soon

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4 minutes ago, JF said:

Just posted this in another thread but may as well put it in here as well. This is a really good piece on why behind closed doors can’t and won’t happen. It’s a sports illustrated article about American sports but it’s the same reasons everywhere 

https://www.si.com/mlb/2020/04/10/sports-arent-coming-back-soon

Agree, the problem is the sports press have nothing else to talk about and discuss so it gets raised every day.

The EPL have to be seen to be doing something so will run with any idea they can just to satisfy people that they are trying. 

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11 hours ago, Van wink said:

The grounds will still be there, the players will still have their boots, the fans will want to watch footy when all this is over.....a well overdue restructuring and introduction of realism to an unsustainable model.

Perhaps, but there would also be tax losses to the revenue, non payment to local businesses and suppliers etc etc. 

I agree that we need a dose of realism in football finances, but was hoping that it might come about without loads of bankruptcies which will have e very negative "knock on effect." 

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16 minutes ago, Badger said:

Perhaps, but there would also be tax losses to the revenue, non payment to local businesses and suppliers etc etc. 

I agree that we need a dose of realism in football finances, but was hoping that it might come about without loads of bankruptcies which will have e very negative "knock on effect." 

Yes of course, sadly there will be many economic as well as human tragedies from CV19

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