A Catholic MP who previously chaired the Digital, Culture, Media and Sport (DCMS) committee has insisted that a ‘gameplan’ is needed to stop football clubs going into administration.
The call comes after Championship side Wigan were recently placed into administration.
A statement said Paul Stanley, Gerald Krasner and Dean Watson from Begbies Traynor had been appointed as joint administrators of the club.
Mr Krasner said: “Our immediate objectives are to ensure the club completes all its fixtures this season and to urgently find interested parties to save Wigan Athletic FC and the jobs of the people who work for the club.
“Obviously the suspension of the Championship season due to Covid-19 has had a significant impact on the recent fortunes of the club.”
Damian Collins, the former chair of the Digital, Culture, Media and Sport (DCMS) committee, said he was sorry to see the news and added on Twitter: ‘We need a #gameplan for football to help clubs that have got into financial difficulties, made worse by the Covid-19 lockdown.’
Mr Collins has suggested the Government should underwrite a scheme to help save clubs affected by the pandemic, but Oliver Dowden, the Secretary of State for DCMS, has said that “football should first look after itself”.
Following the announcement that Wigan had gone into administration, Mr Collins said he had been warning for weeks that football clubs are facing financial ruin due to the loss of match day revenue, caused by the coronavirus lockdown.
“It is sad to see a club like Wigan, that only a few years ago won the FA Cup, now going into administration,” he told The London Economic.
He warned that without a plan in place for paying spectators to be allowed back into stadiums, clubs are now stuck with high fixed costs of paying their players at a time when their income is falling dramatically.
“Many football clubs have at best been run on a break even basis, but there are plenty more who are reliant on loans from their owners to keep going,” he said.
“This model was already broken, but the coronavirus lockdown has made things worse.
“I fear more clubs will go into administration, as Wigan have, but without a clear plan to help them, these clubs will fail to settle their football debts and face expulsion from the football league.
“Our game plan for football sets out how this can be avoided. It’s time for the government and the football authorities to agree proposals to help football clubs in administration.”
Mr Collins, together with Charlie Methven, the co-owner of League One side Sunderland, recently produced a blueprint titled A Way Forward For Football.
It sets out a six-point plan which includes the establishment by the Football Association of a Football Finance Authority (FFA), financially backed by the Government, which would provide funds to keep clubs affected by the pandemic afloat.
Rather than a loan, the report says, these funds would be exchanged for a minority shareholding of up to 49 per cent. The funding could only be used to meet short-term liabilities and create breathing space to restructure finances, rather than on the recruitment of players or improving infrastructure.
An independent director, chosen by a registered supporters’ trust or local government authority, would join the board of the club to represent that shareholding, and then either the supporters’ trust or local authority could acquire the shareholding at a discount to market value at some point in the future.
The blueprint says the FFA should set and enforce the EFL’s financial regulations, and that the FFA should feature representation from the EFL, the Professional Footballers’ Association and the Football Supporters’ Association.
‘Without the reforms of the governance of football finances, any bailout for clubs will be a short-term fix,’ Methven and Collins wrote.
‘Once the pressure is off, the rules – whatever they are – will be bent and challenged by the owners of clubs intent on short-term success, at the cost of medium-term sustainability.’
Picture: File photo, dated 27th January 2018, shows a general view of the DW Stadium, Wigan. (Anthony Devlin/PA).