UK government ready to rescue up to eight sports facing financial black hole

By on September 22, 2020

The government is drawing up plans for an urgent rescue package for as many as eight sports – after being warned numerous clubs are facing financial ruin due its decision to indefinitely “pause” the return of crowds.

With sports organisations fearing spectators may not return until 1 April next year, senior figures in football, rugby union, cricket, horse racing and three other sports met with the culture secretary Oliver Dowden on Tuesday to warn that the situation is increasingly perilous.

While Dowden vowed to help, he also made it clear to the Premier League and other more financially stable organisations that they must do their bit by also helping teams lower down the pyramid.
However the danger to sport was made clear as:

• The RFU warned it would see a reduction in revenue of £122m and that rugby clubs at the heart of communities across England were “in danger of disappearing forever”.

• The Premier League reiterated its warning that football was losing £100m a month – and said “the football economy” was unsustainable without fans.

• Yeovil’s chairman, Scott Priestnall, said he feared “for clubs not just at our level but League One, League Two and maybe some in the Championship”.

• The British Horseracing Authority described the news as “a serious blow” and warned the racing industry “is now facing a severe threat” and the loss of millions of pounds.

The government is yet to indicate the scale of any bailout for elite sport. But while grants, loans and rate relief are all on the table, the Guardian understands that it will be substantially less than the £1.57bn given to the arts in July. A separate £500m package to save grassroots facilities and clubs from closure is also being considered by the treasury, who are said to be sceptical about its benefits. But insiders fear without help around 20% of swimming pools and hundreds of local authority leisure centres could close – costing thousands of jobs, and resulting in a drop in participation.

Grassroots sport has also been hit by the application of the rule of six to all adult indoor team sports – which will impact on basketball, netball and indoor five-a-side football leagues. However children will still be able to play those sports indoors.

Meanwhile the chairman of the Rugby Football Union, Bill Sweeney, warned the government the lack of crowds in the autumn fixtures and 2021 Six Nations would cost the sport £106m and have “severe consequences” at all levels of the game.

“Premiership and Championship Clubs will face significant financial
hardship,” Sweeney said. “Our community rugby clubs are under threat. Without crowds and league games community rugby will lose an estimated £86m in revenue this season.”

A small number of Norwich fans attended the Championship match against Preston but the safe return of supporters to stadiums has been paused. Photograph: Nigel French/PA

The scale of the problem in club rugby was made clear by Tony Rowe, chief executive of Exeter Chiefs, who said that many teams were in an “absolutely desperate” predicament. “We’ve got to get bums on seats,” he told the Guardian. “Without revenue we can’t hang on for ever. We’ve been losing a million pounds a month since March and we’re a club who usually never lose money. You can’t keep doing that. If we can get people back in the ground, at least we’ll have something coming in.

In football the Premier League also expressed its disappointment at the lack of fans in stadiums, saying in a statement that it was “certain” they would “be as safe or even safer than at any other public activity currently permitted”.

“Last season, Premier League clubs suffered £700m in losses and at present, our national game is losing more than £100m per month,” it added. “This is starting to have a devastating impact on clubs and their communities.”

The Premier League would not be drawn on whether it would take on board comments from the government to offer more financial support to clubs lower down the pyramid.

The Burnley manager, Sean Dyche, offered a dissenting view, saying the Premier League should not necessarily help. “If you are going to apply that rule of thumb, does that mean every hedge fund manager that is incredibly successful, are they going to filter that down to the hedge fund managers that are not so successful?

The National League is expected to postpone the start of its season when it meets on Thursday amid huge concerns about how it’s clubs will cope without matchday revenue. As Yeovil chairman, Scott Priestnall, told the Guardian: “I fear for sport. How is it meant to survive without supporters?”

There are also fears inside British Basketball League that some of its clubs will struggle to survive if they are unable to hold games with crowds. Its clubs are holding crisis talks on Wednesday. In rugby league the RFL is forecasting a significant six-figure loss, in excess of £250,000, because the Challenge Cup final on 17 October is now being played behind closed doors. They had been hoping for 20,000-25,000 fans in attendance.

(Additional reporting by Aaron Bower and Greg Wood)

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