Professional soccer in England is on hold until at least April 3 because of the outbreak of the novel coronavirus, though even that date is far from certain: It’s unclear at the moment if and when play will resume — and how leagues will handle matters of promotion and relegation if it does not. What is clear: The financial ramifications of an outright cancellation could be devastating for teams in some tiers of English soccer.
England’s Big Six clubs1 aren’t likely to suffer much from the shutdown, at least not financially. They each cycle in and out of the Champions League and the Europa League — qualification for each of Europe’s top club competitions translates into a handsome windfall — and they earned an average of £461 million in 2017-18 alone (or $557 million by Tuesday’s conversion rates), according to financial data compiled by the consulting firm Deloitte.
Wages for the average Premier League club equaled 59 percent of revenue in 2017-18. Manchester United, England’s most valuable club — and the world’s third-most valuable club behind Barcelona and Real Madrid — spent an astounding £296 million (or $356 million) on player wages in 2017-18, and that still only amounted to 50 percent of the club’s revenue. Barring a catastrophe, Premier League clubs would be able to pay their workers without finishing the 2019-20 season.
The math is a little trickier for clubs in the next three tiers of competition — the Championship, League One and League Two, which are governed by the English Football League (EFL). It might be especially difficult for those that play in the Championship: In 2017-18, Championship clubs spent more on wages2 than they made in revenue. The season before, the average Championship club’s wage bill equaled 99 percent of its revenue.
The margins are less precarious for League One and League Two clubs, but not by much: In 2017-18, the average League One club’s wage bill equaled 94 percent of its revenue, while the average League Two club’s wage bill equaled 78 percent of its revenue. For clubs that are reliant on matchday and broadcast revenue3 to balance the books, the shutdown isn’t just troubling — it could be an existential question.
In a statement released Wednesday after a conference call among club officials, the EFL asserted its intention to complete the current season if public health and time permits. The EFL also announced it will assist clubs with cash flow by setting up a £50 million (about $58 million) short-term relief fund, which breaks down to less than £1 million per club.
The EFL issued a statement on Monday saying that no decisions had been made about what may happen next. “Given the fast-paced environment and parameters we are currently working within, it is simply not practical to give a running commentary on what may happen,” the league said. But it’s hard to imagine a scenario in which at least some clubs in the EFL don’t suffer. Perhaps in an effort to mitigate any future suffering, administrators from the 24 Championship clubs were unanimous in their desire to finish the current season when they spoke on a Tuesday afternoon conference call.
With so many clubs chasing the Premier League dream, life in the Championship has become precarious at best and potentially calamitous at worst. Clubs are routinely spending more money than they have in reserve to push for promotion — and the millions in revenue attendant that dream. A shutdown only exacerbates that. Clubs recently relegated from the Premier League receive parachute payments to relieve some of the financial pressure, so they might be in slightly better shape than others. But clubs chasing promotion this year could be watching millions of dollars slip away.
UEFA’s decision to postpone Euro 2020 until the summer of 2021 and push back the Champions League and Europa League finals might allow domestic leagues to be completed, although Europe’s governing body also issued a resolution stating that all domestic leagues should be completed by the “end of the current sporting season,” which is June 30. If the Premier League and the EFL do opt for an outright cancellation, there is some speculation that league tables would be frozen as they are. In that scenario, relegation from the Premier League to the Championship could be scrapped — a welcome scenario for Norwich City, Aston Villa and Bournemouth, which currently occupy the three relegation spots — while the top two teams in the Championship would be promoted to form a 22-team league in 2020-21.
That would be good for Leeds United and West Bromwich Albion — which sit first and second in the Championship — and very bad for the 10 clubs that still have a legitimate chance to qualify for the playoffs, in which four teams fight it out at the end of each season for the third promotion spot. Take Brentford, for example: The Bees have never gained promotion to the Premier League and currently sit squarely in the middle of a playoff push. Promotion could mean tens of millions of dollars in future Premier League revenue, while staying in the Championship means continuing to operate with razor-thin margins. In the case of an outright cancellation, there is not likely to be a scenario that satisfies every club — especially not the 10 Championship clubs still chasing those Premier League millions.
The worst-case scenario in an EFL cancellation would be to wind up with another Bury F.C., albeit via very different circumstances. Bury was founded in 1885 and was a crucial part of the culture and economy in Bury, Greater Manchester. It had been a member of the EFL since 1894; it had won two FA Cups; it was on the upswing, having gained promotion from League Two to League One during its 2018-19 campaign. But financial difficulties and a period of toxic ownership led to its sudden expulsion from the EFL before the beginning of the 2019-20 season. Now a town is without its team, and a stadium meant for soccer sits void of any.
And now, so too do many others.
The EFL will meet Wednesday to decide the futures of the Championship, League One and League Two. Like other sports leagues throughout the world, the EFL might have no choice but to continue to postpone matches indefinitely to help flatten the curve of the novel coronavirus. Whether clubs will be able to weather the financial storm is their next test.