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CHIEF EXECUTIVE: Every month of social distancing puts at risk £200k of trading income

More from the club on the current situation

24 April 2020

Chief executive Nigel Clibbens continues with his weekly update as he looks at the potential problems to be faced as uncertainty still surrounds the start-date and running of the 2020/21 season.

20/21

The way the EFL ends 19/20 directly and hugely impacts on 20/21. It affects the cash clubs will have left for 20/21, the start-time for the new season, transfer window and player contract arrangements, and critically the legacy financial issues [levels of debt / pay deferrals], plus possible player recruitment restrictions / player goodwill that clubs carry over into 20/21. Resolving 19/20 is therefore crucial to looking further ahead.

20/21 also depends on what the Premier League does, because this could affect promotion and relegation spaces, and that can cascade down the pyramid and into non-league. This also remains unknown at this point. 

The EFL working group looking at salary costs and funding for 20/21, and beyond in League Two, is continuing. Clubs have been giving views for a while and are due to give further input on the initial ideas in the coming days.

Some clubs have made their views public [Mansfield], it shows clubs are looking at this very seriously. This could bring very radical changes to how clubs operate financially, starting very quickly with major rule changes for 20/21. Until this is known, the recruitment market is under another layer of uncertainty.

There will be other specific arrangements for 20/21 that impact on clubs, such as 20/21 season start date, possible live streaming of games [the home club should get all income from home or away fans in my opinion, in that case] and costs of behind-closed-doors games. These are partially controllable, but still unknown or unconfirmed at present.

Other issues facing us come from the far wider impact of CV19. These pose the most significant risk, are the most unpredictable, and are not controllable. The 'socially disruptive measures' may well be in place until at least the end of the year and could have huge ramifications, all of which are unknown currently. Only as the practical reality of what that means emerges will we then know what football in 20/21 looks like.

The timing and nature of the release of lockdown by government, the period of behind-closed-doors games, the economic impact on fans, and on our commercial supporters, will all be affected and that brings financial consequences. How wide, permanent and deep will the impact be? Totally unknown and unpredictable.

All this remains uncertain [and we don’t know what is happening from 8 May], and the range of possibilities is therefore so wide.

However, to give a simple illustration of what we could be faced with in 20/21, our income from normal club trading in a season, over the nine-month playing time, is around £1.8m (ticket, retail, commercial – described as Recurring Business Turnover in the accounts https://www.carlisleunited.co.uk/siteassets/documents/cufc-accounts-up-to-30-june-19.pdf). 

Every month of ‘social distancing’ or behind-closed-doors games puts at risk £200k of trading income [some costs could be saved, but these will be immaterial]. That loss of income is bigger than the current total monthly payroll cost for the whole club, including every player. Losing income on that scale would be impossible for the club to deal with, and I’m sure we would not be alone.

Way ahead

There are major and growing issues in completing 19/20 for League Two. These will create legacy problems to take into 20/21, problems which must be minimised, as we need to conserve as many of our finances as we can for as long as we can. It looks certain there will be permanent losses of income in 20/21, which could be very significant, and if that happens costs will inevitably need to fall in line.

Clubs will need to be very conservative in future spending commitments. My fear is that even doing all they can, the fall in income in 20/21 and the needs of ‘social distancing’ will be so great they will not be manageable without very significant support external to clubs.

It’s clear these uncertainties are not going away, and new ones are emerging. Alongside that, the cash required to resolve them is growing, and that will only continue, in my opinion.

How football operates will inevitably and radically change, and that will affect everyone involved in the game.

There is a very difficult transition period ahead. This is a huge challenge for the game, and it’s coming fast.

With the knowledge and expectation of a long, uncertain, volatile, costly and high-risk situation ahead across the whole game, here at Carlisle United we need to continue to take a very cautious approach. 

We need to balance short-term, and beyond, and we are all going to be faced with very tough decisions to make sure we can deal with the uncertainties to come.  

We are continuing to do our best to manage the situation. Our priority is to protect the club but, as with all clubs, it is getting more and more difficult as time goes on.

I will continue to give you all the information I can.

In the mean time please remember that the most important thing is for us all to stay safe.

Please continue to follow the advice from the authorities. Stay Safe. Stay Home. Protect the NHS. Save Lives.


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