Lower-division clubs need urgent rescue package, says MP Damian Collins | Football

The MP Damian Collins, supported by 18 MPs and former Football Association and English Football League chairs, has written to the culture secretary, Oliver Dowden, the Football Association and the EFL demanding urgent discussions to address the potential financial catastrophe confronting lower-division clubs.

The letter, which is also supported by Charlie Methven, the co-owner of Sunderland, and Philip Day, the chairman of Grimsby, outlines a six-point plan aimed at preventing a looming scenario with many clubs folding as a result of the current crisis.

The intervention comes on the same day that results from the Championship’s second round of testing increased confidence the second tier season can resume, with three positive results from a total of 1,030 players and staff tested, but that it emerged League One is unlikely to vote on a possible resumption until the end of next season. 

Collins, the former chair of the Digital, Culture, Media and Sport committee, has called on Dowden, the FA chairman, Greg Clarke, and the EFL chairman, Rick Parry, to agree to hold talks on a proposal that the FA creates a Football Finance Authority. It would be financially backed by the government and provide funds needed to keep afloat clubs damaged by the coronavirus pandemic.

This funding would not involve loans but the purchase of minority-maximum 49% shareholdings. The money could not be spent on player recruitment or enhancing infrastructure. An independent director, selected by a registered supporters’ trust or local government authority, would also join the club’s board and either the supporters’ trust or local authority could acquire the shareholding at a discount in the future.

“We may only have a few weeks to save professional football in this country as we know it. The shock of the Covid-19 crisis has badly exposed the weak financial position of clubs in the English Football League, many of whom were already on the edge of bankruptcy,” Collins wrote. “For clubs in Leagues 1 and 2 in particular, the loss of match-day revenue and money from the sale of season tickets is a major blow that some will not be able to survive. We want to see football return as soon as possible and for the current season to be completed in the divisions above League 2.

“Overall, if nothing is done to provide financial support to football, clubs with old and famous names will almost certainly go into administration within weeks. More communities will go through the agony that Bury suffered last year. We will also see the release of up to 1,400 players who will fall out of contract this summer.”

The situation in League One is especially dire, with clubs torn over a desire to continue or curtail the season as well as deciding if their voting position should be made public. Time is starting to run out, with all third-tier players required to be tested before non-contact training can begin, and, as Collins points out, it will not be cheap to carry out that process, with regular Covid-19 testing costing around £140,000 per League One club.

“There is a great urgency now for an agreement on a rescue package for clubs in distress, and this will require the resources both of the football authorities and the government,” he wrote. “However, this should also recognise both the short-term requirement for cash and the longer-term need for much greater oversight and regulation of the financial affairs of the clubs, including the opportunity for more supporters and communities to acquire a stake in them. Without this any bailout scheme will only be a short-term fix.

“We would urge you to convene talks for as soon as possible to agree measures that can be put in place to save clubs from bankruptcy and expulsion from the League. We would also ask you to consider our six-point plan as the potential solution to this problem.”

Fulham have confirmed two of the three positive tests recorded during the second round of Championship clubs are their players. Blackburn have confirmed their captain, Elliott Bennett, is the third. All three will self-isolate in line with EFL and government guidance. The relatively low number of positive results is likely to reassure the EFL that a provisional restart around 20 June is realistic.