A FRESH TAKE ON FOOTBALL
TEMPTING, wasn't it, to think that everything was back to normal?That Covid-19 had stopped meddling in our lives.
For a brief period at the back end of 2021, that's how it felt. No masks. No one-way systems. No two-metre gaps. Clicking through turnstiles without worrying if the person in front just has a nasty cold.
Packed stadiums in full voice made the gloomy warnings of financial Armageddon at the height of lockdown sound like knee-jerk hysteria. Look, everyone's fine. Why the fuss?
Yet just as Omicron shattered notions of a return to normality, so the figures released by Bristol City this week are a reminder that, for football, the true horror of the pandemic is still to be endured.
City's accounts for 2020-21 showed that the club made a pre-tax loss of £38.4m for the financial year. To put it another way, the Robins hit the three-year loss threshold permitted under the EFL's profit & sustainability (P&S) regulations in a single 12-month period.
Calling the figure “extremely serious”, Robins CEO Richard Gould said: “Operating without crowds for a whole season has not only had a huge negative effect on revenue but has also resulted in crashing the transfer market and player trading, upon which we have been heavily reliant.”
As, indeed, are most EFL clubs, and the concern now is that Bristol City are only the tip of the iceberg.
After all, they have not acted recklessly. Reading, recently docked six points for breaking P&S rules, lost £40m in the 2019-20 season. However, this was underpinned by a Championship-high outlay of £16m in transfer fees and a rapid escalation in the annual wage bill to £37m, or 211 per cent of turnover.
Catastrophic
In 2020-21, Bristol City's total transfer spend was the £1.2m paid to Wigan Athletic for midfielder Joe Williams and their wage bill represented 123 per cent of turnover.
The Robins have suffered a potentially catastrophic loss from doing absolutely nothing out of the ordinary, at least by the lunatic standards of the Championship. It stands to reason, then, that others will be similarly afflicted, especially those who budgeted against larger crowds and/or player sales.
“The bigger picture for football is there are going to be some tough times ahead for many, many clubs,” said boss Nigel Pearson, and it's an inescapable conclusion.
Now, the EFL faces some tough decisions. In August, the organisation clarified that the 2019-20 and 2020-21 seasons will be counted as a single year for P&S purposes to address the impact of Covid-19.
Yet as Bristol City prove, that is unlikely to prevent numerous clubs falling foul of the regulations over the next 24 months. The losses are just too big.
Will the EFL dole out points deductions for what was effectively an act of God? It feels unjustified, yet any kind of moratorium is fraught with issues.
Having already hit Reading for six points – after adjusting for Covid-19 – the EFL has set a precedent. It would hardly be fair on the Royals if others were spared. Equally, Reading had already crossed a financial Rubicon long before the pandemic sealed their fate. Why should teams who wilfully overstretched to gain an advantage in the past be rescued by force majeure?
Regulation
Millwall, whose finances were in such good shape that they weathered the pandemic without breaching P&S, would rightfully take issue with that. Financial regulation may yet ride to the rescue, providing a new framework that consigns P&S to the scrapheap.
Nobody , though, should be under any illusion that the formation of an external regulator will be anything but long and torturous, with resistance from the Premier League certain. It may yet be derailed entirely.
This is a problem the EFL and their members must solve themselves and, whilst fairness is a cornerstone of any sporting competition, imposing punitive sanctions for accidental offences will not help anybody.
