Football finance expert paints grim picture for lower league clubs

Football finance expert Kieran Maguire has warned that some clubs in the EFL face a grim future due to the impact of the coronavirus pandemic.

There is still no official return date for either the EFL or the Premier League two months on from when the season was suspended, and even when football does restart, clubs face the prospect of having to play behind closed doors for several months.

That would be a financial nightmare for clubs in the lower leagues who rely heavily on gate receipts and season ticket sales, although Northampton chairman Kelvin Thomas has regularly reassured fans that the Cobblers are in a 'relatively strong position' to tackle this unprecedented situation.

The same can't be said for all clubs in the EFL though. “The clubs in the lower leagues, most of them have got fairly precarious finances to begin with and have operating on a week-to-week basis in terms of meeting their financial obligations, paying the rent, paying the wage bill, paying the council tax and so on,” Maguire told the PA news agency.

“And that’s during a season when they were having regular fixtures. Both Macclesfield and Southend failed to pay wages in February. Oldham didn’t pay their March wages until, I think, two days ago, so there’s a backlog in terms of wages being paid.

“How clubs can address that is beyond me if there is no money coming in through the turnstiles, which accounts for around 40 to 50 per cent of total income for some League One and League Two clubs. The industry has been effectively taken out at the knees as a result of the pandemic."

It might not be until 2021 when fans are allowed back into stadiums again, and if that is the case, Leyton Orient chief executive Danny Macklin believes income from streaming games could save clubs.

Clubs currently get 80 per cent of subscriptions to the EFL’s iFollow platform and Maguire says Sky Sports, UK rights holders, would be flexible enough to negotiate an agreement on that.

“Until the EFL have a product which is watchable, then the broadcasters aren’t going to pay for it," added Maguire, the author of The Price of Football.

“Matchday income – nothing until we resume. TV – undecided until we’ve got some form of football taking place. And then the third form of income for clubs is sponsors – well, you can’t sponsor a football match which isn’t taking place.

“If you take a look at the losses in the Championship – there’s a couple of clubs that haven’t published their results, Sheffield Wednesday and Derby – I think we’re looking probably at a cumulative operating loss of around about £650million in the Championship.

"The game was living at the edge before the pandemic. It's not a sustainable business model unless you have sugar daddies who are prepared to write out those cheques for £20-30m a year - which to give them credit, most of them have been keen to do for reasons nobody has ever quite managed to fathom.

"But if we now move to a situation where there's no money coming in, those losses of £20-30m a year in the Championship could easily extend."