Up to 15 professional football clubs are in danger of bankruptcy because the coronavirus pandemic worsens a “broken” business model, MPs have warned.
The warning comes in a grim report from the Digital, Culture, Media and Sport Committee on the impact of Covid-19 on the sports and cultural sectors.
Sport has been severely affected on a recreational and professional level and there is fear of the future of many organizations.
In the field of football, the committee has called for a “reset” of the game’s financial performance, especially in the lower leagues, with the cash-rich Premier League doing more to help.
“The current business model for football is not sustainable,” says the report of the DCMS committee, which examines the work of the Digital, Culture, Media and Sports department.
“The Covid-19 crisis has shed a clear light on the financial problems in football.
“The Premier League is the main revenue generator of English football. If it doesn’t come up to help the English football league, many more clubs will follow in the footsteps of Bury FC. “
Commission President Julian Knight MP told PA news agency: “There are currently 10-15 clubs on the watchlist as to whether they are going bankrupt. That comes from the EFL. That’s one in five.
“That would be absolutely tragic for many communities across the country. A reset must be performed.
“This has been broken for years, but the fact that EFL clubs (now) cannot get people through their turnstiles means that some of them are in danger of extinction. They don’t have the big TV deals that the Premier League has.
“Any idea that there would be a government rescue plan is for the birds, in my opinion, when there is a £ 9 billion TV deal at the top of football. The football family needs to get together and work together to to solve. “
The report also suggests that parachute payments should be dropped as they disrupt the playing field and salary limits should be introduced.
After a three-month hiatus, the Premier League and Championship resume competition behind closed doors in June. With broadcast income to back it up, Test cricket and golf have also resumed in the country.
This has not been an option for sports – and in the wider world, theaters and music venues – that rely more on a paying audience.
Critically critical of the speed with which the government is responding to problems in other cultural sectors, the report calls for continued support for organizations. It also says that there should be more cooperation from all concerned to find solutions to limit the impact of distance requirements on the size of the public.
Knight said, “If we are not careful, we risk becoming a bit of a cultural wasteland. We are a world leader in culture and the damage that is being done today, if not handled with confidence and speed, can lead to widespread destruction of our cultural and sporting infrastructure.
“That’s where we come from, trying to make suggestions to the government, and also finding ways organizations should work to effectively get through this and ensure that we still have a strong sports and cultural infrastructure within 18 months in two years’ time, hopefully if we go through this together.
“We need a way to actually reopen these locations, in the medium term, without social distance, because it doesn’t work.”
At the recreational level, the DCMS report calls for the creation of an “activity fund” to insure people affected by lockdown “including the elderly, BAME people, the disabled, women, people with a lower socioeconomic background and people who do not have access to physical content online ”are not left behind.
There is also a section on how women’s top sport has been disproportionately affected and sports organizations are requested to limit this.
Commenting on the report, a DCMS spokesperson said, “It has been clear to us that funding the resumption of sport at the highest level should support the wider football family, and we continue to have discussions with the authorities on how football can help that it is durable.
“Last week we outlined plans to help sports safely reopen their doors to fans in the coming months.
“We are also committed to a review of football governance, with input from fans, also taking into account the test of the owners and directors. Details will be released in due course.”
Regarding the role of DCMS, Knight believes it has become clear that the department is underfunded.
He said, “I think one of the things we’ve identified is that DCMS itself is a Cinderella organization.
“I think it’s about 0.5 percent of government spending, yet it accounts for a quarter of the economy. That does not marry.
“I would say there is a real problem at the heart of the government about the power of DCMS and how much weight it has over the treasury and, in that regard, whether it is well equipped to help us through this. “