Fans in both football and rugby should be helping run their sports, according to a report from a leading think tank.
Both sports should seek the influence of supporters groups in plotting the way ahead for a sustainable and responsible future, according to Onward and their new publication.
The report, called A Sporting Chance, focuses on how professional football below Premier League level, cricket and the two codes of rugby are coping during the coronavirus pandemic.
Will Tanner, Onward’s director, said: “A number of clubs are already facing severe financial difficulty and if the distancing and gathering restrictions continue into next season, we will see large numbers of clubs collapse and many towns lose the cultural heritage sports clubs represent.”
The report calls on ministers to act urgently “to protect the clubs that are the pride of many communities, which will be needed to bring the country back together again once the crisis is over.”
One of the key measures, it says, should be the release of £150 million to support fan takeovers of clubs promised in the Conservative manifesto.
Analysis of the financial accounts of the combined 92 clubs in the English Football League, Rugby Super League, Gallagher Rugby Union Premiership and County Cricket championship reveals the extent to which most clubs entered the crisis as loss-making and rely heavily on matchday income to shore up their balance sheets.
Of the 71 clubs playing in the English Football League this season – that includes Cardiff City, Swansea City and Newport County – 47 posted an operating loss in their most recent accounts and six clubs are in serious financial trouble, according to the latest Begbies Traynor Football Distress Index, including established clubs such as Oldham Athletic and Notts County, the world’s oldest professional club.
English Football League clubs, on average, rely on gate receipts and TV income for more than two-thirds (69%) of their revenue.
Rugby league clubs are particularly hard hit because their season only started in January, meaning they are set to lose receipts from more than two-thirds of matches (71%) compared to just a fifth (22%) of games for neighbouring football clubs.
A number of Super League clubs were already in financial difficulties, with four top-tier clubs going into administration since 2011. Club chairmen estimate that clubs could lose up to £1 million each if the season is suspended. The Government has since stepped in to support Rugby League with a £16 million loan.
Rugby Union clubs receive 29% of their income from gate receipts and a further 25% from commercial revenue. This means that over half of club income – around £7 million – is vulnerable as a result of the crisis.
County Cricket clubs are less reliant on matchday income than other sports due to a grant from the ECB.
The average county club takes 12% of revenue from gate receipts and a further 24% from commercial, catering and hospitality.
This means that just over a third of income is at risk from a prolonged lockdown. Of those clubs for which accounts are available, 50% posted an operating loss in their most recent accounts.
The report also finds that demand for grassroots sports and exercise is increasing to support people’s physical and mental wellbeing during lockdown, but access to services is limited and declining.
The report calls on ministers to consider a number of steps to help sports clubs to weather the storm, including the following:
- Review the terms of the Coronavirus Business Interruption Loan Scheme (CBILS) to ensure it is appropriate for loss-making sports clubs. One option would be to offer sports clubs a similar arrangement to start-ups: the Government would offer loans that would be converted into equity at a discount and sold directly to fans if club owners did not repay.
- If seasons are restarted behind closed doors, ministers could also make clear that additional broadcast revenue should be used to support lower-league clubs facing financial difficulty.
- Explore the possibility for all schools, colleges and local authorities to make publicly owned sports facilities open for socially distanced exercise as lockdown eases.
- Support more clubs to become community-owned, including by launching the £150 million community ownership fund to support fan takeovers of clubs promised in the Conservative manifesto.
- Subject sports clubs to stricter financial reporting requirements to improve transparency and reduce the risk of financial mismanagement.
- Temporarily designate stadia as “assets of community value” to prevent their sale without first consulting the local community.
Tanner added: “The Government’s majority was built on the back of rugby league and football towns in the North and the Midlands, where sport is not so much entertainment as a religion. These clubs are not rich – in fact, most are loss-making. Even if play resumes, the suspension of the season risks relegating dozens of clubs to the tides of history.”
“Before the planned June restart, ministers should take immediate action to protect sports clubs that are the pride of many communities, and which will be needed to bring the country back together again once this pandemic is over.”