On the streets beneath the Premier League’s ivory towers, among the English Football League’s proletariat, the COVID-19 crisis has plunged some lower league clubs into a state of financial uncertainty that could prove fatal.
“This is about survival of the English Football League, you’ve got to be clear here,” American-based owner and chairman of League Two Plymouth Argyle Simon Hallett told us on a Zoom call Wednesday.
As you may recall, Hallett is an English-born corporate investment officer who lives in Bucks County, Penn. He purchased part of his childhood club after listening to MiB Pod Specials with current and former English football chairmen, namely Barry Hearn [Listen to our Pod with Simon HERE].
For perspective on the magnitude of financial challenges lower league clubs face in these dark times, we dialed up Simon whose beloved Pilgrims currently sit third place in League Two, a single point off first place and poised for a promotion push… if the season returns.
What we found out from the below conversation - truncated for clarity and brevity - is a point that Davo made on this week’s Pod: while we want things to be black and white, the current shade of club football’s future is a murky gray.
Can you give us examples of unique challenges lower league clubs face right now, both in terms of finances and what it will take to return to the field?
The general perception is that clubs are vastly rich and that owners make a lot of money, but they don’t. Football is financially very, very fragile. The big difference is of course that there are some very deep pockets in the Premier League.
It’s all about where the club’s revenue comes from. One of the biggest differences between the Premier League and the lower leagues is the ratio of media income to ticket income. For most lower league clubs, their biggest source of revenue is putting on a match on a Saturday afternoon. And if there are no matches, you don’t have any revenues. But you do have costs. And the costs are dominated by player costs.
Which leads me to another big difference between the Premier League and lower leagues: the length of player contracts. Most lower league clubs - if you have a squad of somewhere between 18 and 26 - have a very high proportion of those players on short-term contracts. So at the end of every season you have to re-negotiate or let go players. The first year I became involved at Argyle four years ago, we played in a playoff final at Wembley on a weekend. By Tuesday, we had two players under contract.
For us, if we finish off the season in let’s say in August, we won’t have a full squad under contract. So what do you do? Do you say, “Right, every single contract gets extended by three months,” in which case you’re going to get some clubs saying, but I don’t want to pay that player for another three months because I was going to release them anyway. Or do you say, “It's a normal transfer window. Contracts are out and you just get a new team,” in which case the integrity of the season is completely destroyed because you’d be playing with new teams.
We just don’t know what the answer is. But that contract issue is much more important for us than it is for the Premier League teams because we’re going to have a higher proportional number of our players no longer under contract.
You’re not just owner/chairman of Argyle, you’re also a childhood fan. Do you feel the emotional loss of football more acutely because of that fandom?
Funnily enough, I don’t feel emotional about it day to day. This is about survival of the English Football League, you’ve got to be clear here. I’ve been much more concentrated on the survival of other clubs in the football league than I have on whether we get promoted or not. Even as a fan, it’s a secondary issue now. It’s about the integrity of football. It’s about absolutely doing our best. The primary goal here is to make sure the football pyramid remains in as healthy shape as it can be, because it’s not going to be in healthy shape at all. We literally don’t know what’s going to happen. We have no idea.
What do you see as the “new normal” for lower league clubs when football returns?
This disaster is going to push a lot of clubs into bankruptcy, unless there’s some way of rescuing them. I think it’s going to be damaging for player wages. You’re just not going to have the money. Budgets are just not going to be around to pay the kind of wages we paid.
Is there a moment - or snapshot in time - that has given you hope and lifted your spirits during these dark times?
The big thing we’ve done, pretty early on, a couple of weeks ago is we handed over our stadium, which includes the new Mayflower grandstand, to the National Health Service. They’ll use it to perform some of the routine work that would typically take up capacity at the hospital, releasing capacity to deal with virus victims. We’ve tried very very hard to re-establish Argyle as a community club, the heart of the Plymouth, Devon, Cornwall community. This is a way of showing that we’re not pissing about. At times of crisis, Argyle has stepped up and performed the role we would expect a football club to perform in a community. [Editor’s note: Argyle’s Home Park is a ground that has weathered crises before. READ HERE]
At its most obvious, it’s handing the grandstand over to the NHS, but you don’t need to go above and beyond. It’s continuously doing the little things. Antoni Sarcevic, one of our players, went around and did the grocery shopping for his next door neighbor. The club’s community trust has been phoning up people to make sure they’re okay, offering up help, doing deliveries. When it comes to our creditors, local small businesses will be given priority.
We were on our way anyway, but this has accelerated making Argyle a club the city is proud of.