Mini-budget could plunge football clubs into financial crisis and, once again, the poorest will suffer most
The game’s facing a harsh winter of discontent but this time it’s not of its own making, writes Laura Lawrence.Embed from Getty Images
Many households are feeling the increasing pressure of energy bills rising and now interest rates, all caused by a fiscal policy to ‘encourage economic growth’. With the price of everything increasing where does this leave football clubs?
Most clubs are up to their armpits in borrowing and as primarily a winter game, the need to keep the lights on is essential. This ideological financial gamble doesn’t just affect supporters and their own homes but the clubs they love.
In terms of loans and borrowing, the rates are likely to shoot up in an attempt to stabilise inflation. Kieran Maguire, football finance expert, has reported that interest rates are beginning to have an effect on larger clubs including Manchester United. In 2021/22, Man Utd’s interest on their borrowing alone was £62.2million. The weak pound will only increase the interest owed. As a club with the ability to globally generate income it’s not unreasonable that they might be able to absorb the increase (dependent on the Glazer’s dipping their hands in the pot of course).Embed from Getty Images
But what about clubs in the lower part of the football pyramid? Those that have had to borrow to stay afloat, to stay competitive, to survive? Tens of thousands, hundreds of thousands extra in interest could finally see them off, in the way the ITV Digital collapse tried to, and coronavirus has contributed towards. It is never ending.
The advice to households is always to reduce spending and pay off the expensive credit first. EFL clubs are preparing to rearrange fixtures in order to take advantage of the daylight savings. The earlier the match, the less likely the home club is to use extra energy on floodlighting. Both clubs have to come to an agreement in order to move to 1pm kick-offs.
The idea isn’t as straightforward as it sounds. Vocal Accrington Stanley chairman, Andy Holt, tweeted that he and manager, John Coleman, had discussed the option of a 1pm kick-off for their League One clash with Morecambe at the Wham Stadium on Saturday, but their preference remains for a 3pm start. This is partly because of tradition but also Accrington’s stance is that they generate income from their bar before and after the match. What they would gain from floodlight savings they would lose from bar revenue. Clubs are stuck between a financial rock and a hard place.Embed from Getty Images
This is only a fraction of this issues clubs could face from this economic crisis. Fans are not going to be able to justify the cost of a ticket to a match if they can’t afford their mortgage, the increased rent from their landlord passing on the costs, their energy bills, their inflated grocery costs, the petrol to attend…
Some will say this is scaremongering but the only people who have slightly benefited from the mini-budget are the footballers themselves due to the 45 per cent tax cut.
Whenever you think that football can’t plunge into darker times it falls deeper into the pit. For once this isn’t all their own doing.
Follow Laura on Twitter @YICETOR
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