Clubs could go bust warns Rotherham United chairman Tony Stewart
Rotherham United chairman Tony Stewart has warned that a number of League One and League Two clubs will go into administration later this year if the English Football League does not come up with a financial rescue plan to handle the coronavirus crisis very soon.
Stewart’s plea for the EFL hierarchy to act quickly to secure the future of lower-league clubs comes in the wake of concerns from his Scunthorpe United counterpart, Peter Swann, who has stressed that the situation is reaching a crisis point in the lowe r leagues with many clubs facing a battle for survival amid the game’s shutdown.
The Millers chief has revealed that his own club face a shortfall in income of £550,000 by the end of June and is urging the game’s governing body to come up with deeds and not words to enable clubs to pull through.
League Two officials spoke with EFL chiefs in a video call on Tuesday with the parlous financial situation facing clubs being top of the agenda alongside discussions about when the league may be restarted.
Stewart, who has allayed fears that the Millers may be one of those clubs who could go into administration, said: “The general population look for the government for direction. We have a body called the EFL and it is up to them to come to us and say: ‘we understand the problems, we are working them out.’
“We do need answers and we need them quick.
“We heard weeks ago where the Premier League said: ‘we will donate £125 million to the EFL and National League.’ But what has happened? They have had meeting after meeting.
“What I would like, and I am sure that a lot of chairmen from League One and League Two would agree with me, is for the EFL to give us direction to say: ‘this is what we are going to do, this is the answer and antidote.’ And we move forward.
“I know it is not an easy situation. But it is a problem and has to be solved by the EFL. That is their role and they are in charge.
“Because if that is not going to happen, we are going to have anarchy with all the chairmen of League One and League Two [clubs] doing different things. We do need that direction from the EFL.
“It is the debt which is the problem [for clubs] . The alarm bells are ringing as the income is being stemmed and we don’t know how long for.
“We cannot sell season tickets as you don’t know what sort of season you have got [in 2019-20 ]. We don’t know if we are going to play behind closed doors or whatever.
“Everything is not simple. But the simplest thing is if we do nothing, then the debt will increase month on month and payments will stagger and football clubs will have to go into administration.”
Following recent discussions between the EFL and lower-division clubs, a working group of six club captains or PFA delegates from third and fourth tier clubs was established in order to ‘engage in dialogue in respect of players’ wages and find some common ground.
A collective recommendation was made that players in Leagues One and Two agree a wage deferral of up to 25 per cent for April.
The terms of the deal would mean no player would see his wage reduced below £2,500 a month, a figure equivalent to the maximum level of subsidy under the government’s furlough scheme.
Stewart commented: “There has been talk about getting captains together. What they ought to do is get the chairmen together, not the captains.
“At the end of the day, if any club cannot reduce its bills, it will not meet the debt of payment because the income has been stemmed. If the overheads and costs of running a club cannot be reduced, then the companies –football clubs – will go bust.
“You work out what the income is and we have done cash flows to the end of June and there’s things like loss of crowds and hospitality – a big thing at Rotherham as we can get something like 700 in seating.
“You also take into account sponsorship and a lack of selling season tickets and that means we will have a shortfall of £550,000 by the end of June.
“I can paint a picture – not just for Rotherham but different teams – that there is a sudden loss in cash flow.
“I had said we will be short in cash-flow terms of £550,000 by the end of June. If games are played behind closed doors up to Christmas, you have got to be talking about a million pounds.
“We have always kept ourselves [ financially] fit, so that if a rainy day comes along, I think we can weather the storm.
“I do think it is not about weathering the storm, but looking at the storm and seeing what it has brought about and coming in with some form of answers to the problems bestowed on football clubs.”