Since my last update just over a week ago there have been a number of important developments, which demonstrates exactly how uncertain and unpredictable the situation remains.
I have said before that the EFL has been talking with the PFA about how players can help clubs to survive, and then recover, to protect jobs now and in the future. I have also said that ‘we will have to make profound changes to how we all operate. That will start immediately for the 20/21 season, in my view.’
The EFL and PFA agreed to form a working group of six club captains / PFA delegates from Leagues One and Two, supported by a representative nominated by the PFA, to engage in dialogue in respect of players’ wages. While the working group will not be a formal negotiating body, it will help to ensure that players are fully informed of the issues facing clubs and the wider game, both now and in the future.
The focus will not just be on the short-term (May and June) but will address the medium-term position, from the start of July onwards and into next season. This is a step towards that. We are expecting the initial results of this initiative to start to emerge soon.
A compromise proposal was agreed between the EFL and the PFA for those clubs engaged in deferral negotiations with their players, meaning that up to a maximum of 25% of players’ wages for April can be conditionally deferred. Our information is that the vast majority of League Two clubs did not implement this during April.
Our players and staff will be paid in full next week as normal (for April). We, as a club, have used the government’s Coronavirus Job Retention Scheme (JRS) and submitted its claim for March. That scheme is providing essential support, which we cannot do without during this closedown. We will be using it again in April in support of this month’s staff costs, with the club again topping up the amounts not covered by the scheme, even though we have no business turnover.
Clearly the longer the lockdown lasts, and the longer matches are delayed or behind-closed-doors, the more difficult it becomes for all clubs, including us, to do this.
The nationwide Coronavirus lockdown was extended for at least another three weeks, until 7 May at the earliest, as any change in social distancing measures would ‘risk damage to both public health and our economy.’ Whether the EFL’s indicative timetable for the restart of the 19/20 season [below] is viable remains totally uncertain at this point, in my view.
The EFL asked each club to prepare a financial forecast, up to 30 September, based on assumptions which included completing the 19/20 season, starting training on 16 May, playing the first weekend of June and finishing by the end of July, with 20/21 commencing the first week September, and with all games during that time to be played behind-closed-doors. We submitted our forecast earlier this week, and the numbers are very concerning.
Government Coronavirus JRS was extended for a further month, to include June.
All League Two clubs held a video conference to get an EFL update and discuss the issues, and their ramifications. I was on the call representing Carlisle United, and John Nixon was chair. Rick Parry, chairman of the EFL, also participated, along with the other League Two clubs. We were able to raise any questions, in particular about the 19/20 season [the main focus of debate], the prospects for 20/21 and our forecasts, and the ongoing work of the League Two working group on Salary Cost Management Protocols [player spending] and club funding.
The government announced that the UK faced 'socially disruptive measures' until at least the end of the year. It is uncertain what the measures could be, or how they would affect training, travel, playing or spectating. Until we know these facts, the financial impact is uncertain, and the steps the game and clubs might need to take remain difficult to assess. This is a huge problem heading towards us.
Put simply, things are not getting easier or clearer, and the costs of being in lockdown for clubs are increasing. As time goes on it’s getting more difficult for everybody as cash drains away.
I said before that ‘as it continues, the accumulation of practical and financial problems accelerates. Fixing these problems will take longer into the future to achieve and will be more costly.’
So, none of this comes as a surprise, we can see this impact everywhere, even over the course of just the last week, and even after the government announcement on 22 April.
The safety issues remain paramount and, as the EFL has said all along, football cannot resume until it’s completely safe to do so. The EFL board position remains to work towards a completion of the 19/20 season.
With this backdrop, further planning by the EFL has to continue to take place to look at the operational and financial implications of finishing the current season [and for 20/21]. Each division has common problems, but important differences are coming to the fore, especially in terms of income, costs and funding requirements.
The EFL forecast review from 16 April is crucial in understanding the cash required by each club (and division) to get to 30 September. Under the current EFL headline timetable for completing the 19/20 season, and starting the next, the working assumption is no crowds until 1 October at the earliest. What if that lasts even further into the future? [The government announcement on 22 April doesn’t bring any new optimism].
It is immediately obvious, playing games behind-closed-doors incurs some staging costs compared with remaining closed [amount will be determined by what behind-closed-doors actually means, in practice]. Refunds of 19/20 season ticket and commercial cash already received are likely. Players and staff working again immediately ends furlough and takes away the crucial and significant government funding support available to League Two clubs through the Coronavirus JRS.
The extra income from games to cover these changes is very significant and remains uncertain. This creates some new and potentially big funding issues. Continuing that into 20/21 [until 30 September] has huge financial implications for us and other clubs and, obviously, these implications will increase if the situation continues for longer. The concerns of clubs were shared with the EFL and they understood the issues raised.
The rolling over of 30 June player contracts to finish the 19/20 season is still unresolved. Player loans will start to expire from 26 April, and to have those players concerned available for a restart of the 19/20 season, they must be re-contracted before they expire – even though we have no certainty on any 19/20 games taking place.
David [Holdsworth] and Chris [Beech] have the difficult task of making football decisions, and the club has to consider the value in doing deals for 19/20 based on the little we know – and the huge amount we don’t, and what extra we can afford to commit financially on loan players for the last nine games [knowing it drains what is left for 20/21].
However, like us, many clubs are now facing up to the real and very stark prospect of using future 20/21 income; like season tickets, transfer fees they are due to receive in the next few months, and 20/21 EFL/PL funding, to finish 19/20, only to then still be faced with a highly uncertain and increasingly difficult 20/21 anyway.
Once this cash is used and transfer fees collected there will only be match walk-up income and future commercial income, but with 'socially disruptive measures' likely to be in place until at least the end of the year, no certainty of crowds, and commercial income that is impossible to predict – as you can see, the future risks for 20/21 are growing.
With that background, is it sensible and realistic to use whatever money we have left in June and July on finishing the 19/20 season? Some owners are starting to make their private positions on finishing 19/20 public, and I expect more will follow.
We have to recognise all of the risks that could be coming our way and weigh that when considering what we do in the short-term about 19/20.
To resume 19/20, government relaxation of the lockdown would be required to allow travel, training and playing. How 'socially disruptive measures' will permit that from mid-May is unknown, and the government has so far given no clues at all, which does not help us.
Clubs will be faced with managing the safety and welfare of players and staff travelling to venues (in our case every away game hotel, and long periods of close contact on coaches while travelling), and all at a time when Coronavirus remains active in the community [it isn’t going away by June]. The status of the virus in the community and any relaxation will control and determine when the club reopens, and when the game beings to restart.
At best, I hope we can have a clearer way ahead for 19/20 in the middle of next month, after the next lock down review by the government on 7 May.
We'll have more from chief executive Nigel Clibbens on the official website later today as he talks more about the impact on clubs as uncertainty also surrounds the 1920/21 season.