Non-League Football’s Winter of Discontent
That it should have come to this is partly a matter of force majeure. These are the most unusual of times, after all. On the other hand, though, there are lengthy (and tedious) debates to be had about how we came to be where we are now in terms of managing the pandemic in this country in a general sense, still more about the way in which the sustainability of football clubs has been dealt with.
None of this negates the position in which we find ourselves now, but the current three-way row between the Department for Culture, Media and Sport, the National League, and the National League’s clubs has turned into a stain on non-league football, with the clubs themselves completely justified in wondering how the DCMS remotely expects them to survive in the long-term under the conditions of the deal that the government claims that they have agreed.
For many non-league football clubs, survival, even under normal circumstances, is far from guaranteed. The economics of the Premier League’s three decades of ascendency have most noticeably manifested themselves in hyper wage inflation trickling down through the divisions, stretching the budgets of all clubs as far as they can be pushed. And when clubs that are largely depenent on match day incomes for their financial health have that income snatched away, the problems quickly start to multiply. It is a minor miracle that practically no clubs of consequence have already gone to the wall, over the previous ten months.
The root of the current disagreement is a meeting held between the Department for Digital, Culture, Media and Sport and officials from the National League in October which was supposed to sort out funding for clubs at Step One and Step Two of the non-league pyramid. An £11m package was agreed through Sport England’s Winter Sports Survival Package to fund clubs through the period of January to March, but both the National League and several of its clubs claim that this money was agreed to paid through grants, while the DCMS is now claiming that it was always their intention that this money should be paid in loans.
That this should be an issue for clubs is hardly surprising. Primarily, with the finances of non-league football being as precarious as they are, clubs are concerned that they will never be able to repay these loans, but clubs have other concerns, as well. If these loans are to cover a three month period, then what happens for the last two months of the season? This probably should have been sorted out for the whole of this season in one go, and it says a lot about the blind optimism and parsimony of those who were behind it all that we’ve had to return to the subject again and again.
And then there’s the small matter of the fiduciary responsibilities of those running the clubs. Directors have a legal responsibility to keep losses to creditors at a minimum and as such, if directors knowingly trade whilst insolvent, they could incur personal liability for company debts. Is this, they have reasonably asked, what the government is telling them to do? Clubs have been told that they can apply for grants if loans are demonstrably unaffordable, but what the criteria for this might be haven’t been made clear.
So, was this loans versus grants thing a misunderstanding or, considerably worse for a variety of different reasons, is somebody telling fibs about what was agreed at this meeting? One would expect minutes to have been taken that would confirm this, but there even seems to be some degree of disagreement over whether even this happened, none of which reflects particularly well on the competence of anybody involved.
The response of the clubs to all of this has been a combination of righteous fury and resignation. A group of seventeen National League clubs have called for the season to be curtailed unless funding is arranged towards coronavirus testing and to offset losses, and the statement that accompanied it reflected this increasing level of jadedness:
When National League clubs agreed in October to start the season playing behind closed doors, this decision was based on reassurances that grants would be provided to compensate for essential revenue lost from fans not returning on 1st October.
Had these assurances not been provided then many Clubs at our level may have taken the decision not to commence the season.
Matchday revenue from supporters attending games and its associated income streams are the lifeblood for our clubs. We are grateful to the Government, The FA, and the National Lottery for recognising this and the roles our clubs play in their communities. We thank them for the grant support we have received to date.
The initial package of £10m was to cover the first three months of the season with the clear understanding that grants would continue until it was safe for crowds to return. There was absolutely no mention of loans at that time.
We have all worked diligently to comply with elite sport protocols and ensure a prudent approach to financial management based upon the reassurances given in October.We the undersigned clubs therefore call on the Secretary of State Oliver Dowden, the Department of Culture, Media & Sport and The FA not to betray the trust of National League clubs placed in them by agreeing to commence the season and to ensure the additional £11m in support is in the form of grants not loans.
The National Leagues North & South were suspended for two weeks on the 21st January, a move which seems to sum up the absolute chaos into which the season is falling. Although only seventeen clubs signed the joint statement, it is understood that an overwhelming majority of the 66 clubs in the three National League divisions will not accept loans in order to keep going, so exactly how the season can continue when this brief suspension ends is completely up in the air. The DCMS, meanwhile, the effectively called them liars:
It is untrue to suggest funding to the National League was ever promised as all grants, and they have been unable to substantiate this claim.
In October we brokered a unique deal with the National Lottery to provide a £10m cash injection to keep step one and two clubs afloat, and recently announced another £11m in low-interest loans to support them in line with support offered to other sports.
If any individual step one and two National League club can demonstrate it is in critical need of support and would be unable to repay a loan, grant applications will be assessed on a case by case basis.
This will of course be through the same rigorous process that we apply to other sports.
The situation below the three divisions of the National League is even more desperate. The Trident Leagues – the Isthmian League, the Southern League and the Northern Premier League – suspended their operations last month, and although the leagues have a provisonal restart date after the 6th March, it seems unlikely that their seasons will be restarting following a recommendation from the leagues themselves three weeks ago that the remainder of this season should be declared null and void. A survey has been sent to all member clubs to gauge their opinions and seeking suggestions on their season could be completed. These three leagues contain a combined total of 224 clubs. A couple of leagues near the bottom of the pyramid have already admitted defeat.
The complications don’t end there, either. The matter of how the previous money made available to the National League ended up being distributed was highly criticised at the time, with the former Minister for Sport Helen Grant calling the National League’s distribution model “flawed”, adding that, “the botch has left many National League clubs in dire financial circumstances.” The league had been expected to allocate those funds based on average crowd sizes but decided to change their approach, which in turn reduced the amount received for some clubs. Clubs who lost out have threatened legal action over this.
And then there’s the case of Wrexham, who found out this week that they are the only National League club who are not eligible for any form of pandemic support due to playing in Wales. A note at the bottom of the government’s statement states that, “The devolved administrations have been provided with an upfront guarantee this year of £16 billion above their Spring Budget 2020 funding to support their response to Covid-19. It is for the devolved administrations to decide how to use this funding irrespective of how UK government provides support in England”, which seems to indicate that Wrexham would have to apply from the Welsh government’s £17.7m grant-based fund to support spectator sports in Wales, but football has only been allocated £1.5m of this total pot, with rugby union getting 76% of the funding.
So it’s complicated, highly time-constrained and, as January ticks over into February, no-one seems to know what exactly has been going on, what is going on, or what will be going on. Some might say, “typical non-league football”, at this point, but this time around the stakes are much higher. The futures of hundreds of football clubs are at stake, and those who are in a position to be able to do something about this but refuse to do so should be warned that many, many thousands of people will not forget, should this all end in a financial apocalypse for those clubs. We’d finish by saying that we hope for outbreaks of common sense from the DCMS and the National League over the next couple of days but, in all honesty, there’s very little to base such an optimistic hope on.