REVEALED: Eight clubs have been saved from going bust this week by emergency EFL loans but 20 more are on the brink as Fleetwood Town chairman warns ‘working class people will never forgive’ the government if it does not help
- EFL created a £50 million emergency loan fund for clubs at risk of going bust
- League says loans will not solve the financial crisis in England’s lower leagues
- Clubs ask for government funds, PAYE deferrals and fans back in grounds
- Government insists there is enough money in football to solve the crisis
Eight football league clubs have been saved from administration by emergency loan payments from the EFL this week, but another 20 could go bust before Christmas.
As revealed by Sportsmail, the EFL introduced a £50 million emergency loan scheme for stricken clubs after it failed to strike a bail-out deal with the Premier League and with no prospect of direct financial support from Government.
EFL clubs are hugely dependent on matchday income, which ranges from a quarter to a third of all revenue in the different divisions, and they have been crippled by the coronavirus restrictions, which ban fans from stadiums.
EFL clubs like Fleetwood Town (in red and white) and Lincoln City depend on matchday income
A host of clubs were looking into the financial abyss and were widely expected to miss their October payroll and go out of business
But the loans will allow them to limp along a little longer. However, another 20 clubs are believed to be staggering towards Christmas and club chairmen believe they too will need a loan to stay afloat into the New Year.
‘Eight clubs would not have been able to keep going, but they had access to the emergency fund from the EFL,’ said Andy Pilley, chairman of Fleetwood Town, which loses around £300,000-a-month as result of the ban on fans.
‘We desperately need the government’s help. Without that we will be looking at another 20 clubs running out of money by Christmas.’
Fleetwood chairman Andy Pilley (right) believes the government needs to help EFL clubs
The EFL’s £50 million emergency loan fund for clubs is only a stop-gap measure. It is an advance on money they would have received anyway next season and will have to be repaid by withholding some of those payments when they are due.
Hence, the EFL and its clubs are arguing for a bail-out followed by a restructure of English football so clubs become more sustainable.
On Wednesday, EFL chairman Rick Parry wrote an explosive letter to Culture Secretary Oliver Dowden pleading for Government grants for EFL clubs.
He said that football was being ‘regarded as a peculiarly undeserving case’ given that £1.5 billion of funding was being directed to the Arts sector to help alleviate the impact of the pandemic.
EFL chairman Rick Parry has written to Culture Secretary Oliver Dowden pleading for help
Fleetwood’s Mr Pilley added: ‘We are going to be talking about how we lost football clubs unless the Government helps find money from somewhere.’
Echoing Mr Parry’s position that the football-loving public will ‘judge the Conservative government’ if clubs go out of business, Mr Pilley, who campaigned for the Tories in Fleetwood at the last election, said: ‘The Conservative Party will suffer immensely if they allow football clubs to go to the wall.
‘Working class people will never forgive them.’
The political point is sharpened by the Conservative’s success in northern constituencies, which helped them win the last election and the government’s subsequent commitment to ‘level up’ opportunity between north and south.
Culture Secretary Oliver Dowden insists that football has the resources to help stricken clubs
If clubs, particularly in small towns and provincial communities, go bust the EFL argues it will be a particularly bitter blow to the social fabric of those areas.
In addition to Government funding, the EFL is also asking for relief on PAYE tax payments and a coherent plan to get fans back into stadiums.
But Government has steadfastly refused to countenance funding the EFL, suggesting that the Premier League is well-placed to help.
A £50m offer from the Premier League to League One and Two, which comprised loans and grants, was turned down by clubs earlier this month because it ignored the Championship teams.
The EFL has introduced a £50m emergency loan fund for clubs on the edge of administration
Suggestion of £250m bailout as part of Project Big Picture was squashed by the Premier League clubs because it would have handed even greater wealth and power to the biggest six sides in the country.
In a statement, a Department for Culture, Media and Sport spokesperson said: “We have been clear that professional football has the means to support itself and have been assured by the football authorities that they have no intention to let any club go bust due to the pandemic
“We have secured a package for the National League and our focus is now on supporting those sports and sectors that need it most and cannot look after themselves. We urge the EFL and Premier League to finalise a deal as soon as possible.”