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Alba Iulia
Thursday, June 4, 2020

Battle for Premier League Survival leaves the field

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In happier times, Premier League fights have taken place on the field and huge financial rewards have been shared. Revenues for English Premier League teams reached a record £ 4.8 billion last season. The value of clubs has increased. Player salaries have gone up.

But Premier League leaders, wealthy club owners, and multimillionaire players have engaged in a blame game on how to absorb the losses suffered aircraft suspension due to the coronavirus pandemic.

The Premier League, the most valuable national football competition in the world, wants to cut costs. According to the consulting firm Deloitte, the most important is that of staff salaries, worth 2.9 billion pounds sterling and representing 59% of all revenues.

For some teams, the problem has become critical. Burnley president Mike Garlick said his club would “run out of money” by August.

“It is a completely unprecedented situation,” he said in a statement. “It is no longer just Burnley or any other individual club, but the entire ecosystem of football since the Premier League and all the other businesses and communities that feed on this ecosystem.”

Salary negotiations between the prominent Premier League, the English Football League, which manages the professional divisions below, and the Association of Professional Footballers, the players’ union, are mired in distrust between the parties .

The big spenders in the Premier League

One person implicated stated that the intervention of The politicians – Health secretary Matt Hancock is one of the deputies calling on footballers to “play their part” and accept wage cuts – has led the talks to take an “odd” turn. Instead of facing the financial crisis, the players focused on defending their reputation.

Premier League called on players to accept pay cuts of up to 30 percent of their annual compensation. The PFA, led by CEO Gordon Taylor, responded by saying it would result in £ 200m less in taxes to the National Health Service of the United Kingdom. Liverpool captain Jordan Henderson is leading a private plan for league players to make charitable contributions, but league officials worry that it does little for clubs facing a crisis. Treasury.

The PFA resisted the cuts, rather seeking postponements so that players’ contracts are fully completed after the closure. The union is also asking for more money for struggling lower league clubs, while requesting detailed information on each club’s financial situation to assess what concessions – if any – should be made on wages.

“There are a lot of footballers with a lot of money, but there are also thousands of lower level footballers looking at the financial abyss,” said Tim Crow, independent sports marketing expert.

In the absence of a general agreement between the Premier League and the PFA, individual clubs such as Manchester United and Arsenal have entered into negotiations to reach their own player agreements, according to people familiar with the discussions.

The approach of some billionaire club owners has also been questioned. Retail mogul Mike Ashley of Newcastle United and Bahamian businessman Joe Lewis of Tottenham Hotspur are among those who said they would use the UK government leave scheme to finance salaries for non-staff player. Premier League general manager Richard Masters wrote on Monday to deputies to defend the clubs using the taxpayer-funded system, saying it was “for the economy as a whole”.

However, someone close to the PFA said, “If you have just made tens of millions of pounds in profit, why should you be looking for staff on leave?”

Liverpool chief executive Peter Moore apologized on Monday, saying the club had come to the “wrong conclusion” when it chose to use the program. After harsh criticism from supporter groups, Liverpool backed down and said it would find other ways to pay staff. Manchester United and Manchester City have completely abandoned this program.

Premier League club performance gap

Others are looking for other ways to close the income gap. West Ham United wants to raise £ 30 million from a private rights offering, offering additional shares to existing investors, according to someone with direct knowledge of the deal. The club did not respond to a request for comment.

The Premier League is not alone in facing the financial consequences of the brutal suspension. La Liga, Spain’s top football division, has said it will lose 150 million euros in revenue from the ongoing blockade, the figure reaching 1 billion euros if the matches in the season cannot be finished.

Javier Tebas, president of La Liga, said attempts to reach a pay cut with the Spanish players’ union had been “impossible”. Instead, eight top Spanish clubs, including FC Barcelona, ​​have used emergency provisions in local laws to cut player wages by 70%. “We have to survive for the future,” said Tebas.

Other European teams have signed voluntary agreements: Bayern Munich players in Germany have agreed to a 20% reduction, while those at Juventus in Italy have given up their wages for four months.

Bayern Munich players agree to 20% pay cut © PA

Salary negotiations in the Premier League began last month after leaders of the 20 member clubs were given a disastrous calculation if the season was canceled and no other games were played. League leaders have been advised that this will result in a reduction of £ 762 million in broadcasting payments, with losses reaching £ 1.1 billion once lost ticketing revenue from unplayed matches into account.

According to people familiar with the pay talks, the Premier League has asked for immediate pay cuts of 10% to cover lost earnings on match day, with an additional 20% being carried over to the end of the year and paid only if matches are ended this summer at empty stadiums.

Over the next few months, the Premier League plans to advance some of the payments that clubs typically receive at the end of the season, with the goal of alleviating cash flow problems. The deal was reached at a shareholders’ meeting last Friday, according to a person familiar with the matter.

Playing “behind closed doors” matches would sacrifice box office revenues but allow the league to protect broadcast offers. British broadcasters Sky and BT are due to make their next payments to the Premier League in July. Last week, broadcasters beIN and Canal + suspended payments to Ligue 1 due to the lack of matches.

While some clubs are rich enough to cope with an extended shutdown, many, even at the highest levels of the game, are not. “Anyone who hasn’t handled the balance sheet right is going to be in trouble,” said an adviser to a large English team. “There are clubs that will not go out on the other side. It’s going to be the end of the game for many, including the Premier League. “

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