BLOG | BY CHIEF EXECUTIVE MATT EVERETT
As sport looks to survive and emerge from the financial impact of the Covid-19 pandemic, many clubs have relied on bailouts to reduce or negate the losses incurred by continuing to play ‘behind closed doors’ or having their seasons curtailed entirely.
Bailouts have come from various sources – in the UK either privately from the top of the game such as the Premier League funding to the EFL, or from state intervention such as the government bailout for the National League and below either directly or via National Lottery funding.
The impact on sports has also varied – those that have continued have managed to largely mitigate the impact on central broadcast right revenues by completing their seasons, albeit with the loss of matchday and other commercial revenue.
However we don’t have to look much further afield to see real problems arising, with the French broadcast deal being cancelled, and an auction to replace the outgoing rights holder not reaching an acceptable reserve.
The terms of bailouts also vary, and clubs are having to navigate carefully through the options available to them. We have seen 3 main routes to a bailout:
- An advance of central/solidarity payments from the Leagues to their clubs.
- Loans from Leagues, State or banks directly to clubs
- Grants from State or Lottery to clubs via their Leagues
Every option does, or should, involve the League either providing the funding or negotiating the funding on behalf of their clubs.
Clearly for clubs, option 3 is the most attractive. Revenues lost to the pandemic are lost forever – they will not recoup those losses for matches played behind closed doors, so taking on loans adds repayments further down the road, as does advancing central payments.
We now see the issues this can cause, with the temporary suspension of Leagues whilst clubs vote on whether to accept terms offered, or continue to lobby for funding to be in the form of grants.
This is where the ClubView product would really come into its own. Leagues are having to play a crucial role on behalf of their clubs, and their hand would be strengthened ten-fold with a real-time dashboard of expected and lost revenues across each club.
From the point of view of the source of the bailout as well, there would then be full transparency of how the funds were used and why they were needed on a club by club level, and this of course retains the level playing field and sporting integrity by ensuring fair and equitable distribution. This is especially important when using public money or money for ‘good causes’ such as the National Lottery.
I wrote a little about this in a earlier blog, but with the impact and realisation that it now looks likely the entire season (give or take a few exceptions in November and possibly later in the Spring) will take place behind closed doors, many clubs are relying on their Leagues to source the funding to allow them to continue.
ClubView is about giving Leagues that real-time economic outlook across their clubs – in the short term to understand forthcoming issues affecting their clubs but in the longer term to enable better financial forecasting and central support to identify growth opportunities and ensure better sustainability long into the future.
For clubs, they receive a wealth of benchmarks and insights to allow them to take measured day-to-day decisions on their costs and revenue streams and see the impact of those on their clubs financial health.
I liken the issue to the gaps seen across other sectors when it comes to support through the pandemic. For example the UK Government Self Employed Income Support programme has unfortunately been unable to help people who became self employed in the 12-18 months prior to March 2020 because there were only annual records of their earnings. Leagues are often in a similar position with their knowledge of club finances.
This is what the ClubView system offers to sport, by empowering Leagues with that information in real-time for the benefit of all of their clubs.