In this briefing, chief executive Nigel Clibbens brings us up to date with the latest developments which directly affect Carlisle United Football Club:
League Two clubs held their latest video conference meeting on Thursday 30 April. It followed the usual format, as has been detailed in previous updates.
We again covered issues relating to the 19/20 season restart and, in particular, the date of 15 May (day of earliest training restart). With no advice whatsoever on how this can be managed safely, it currently looks unrealistic to firstly confirm what to do, organise it and then do it – with only 10 days from today to finalise it.
The uncertainties over 20/21 are unchanged. Clubs again raised more questions and shared ideas. We then considered longer-term financial control in League Two. We also looked at ways in which clubs and players could work together to protect clubs, future incomes and long-term jobs. Progress is slow as talks continue.
SCMP (Salary Cost Management Protocols)
The current League Two SCMP regime is based on clubs being able to spend 50% of their ‘Relevant Turnover’ and 100% of Football Fortune on Player Costs (there are numerous highly technical regulations on what ‘Relevant Turnover’ and ‘Player Costs’ are, and also on what is deemed to be Football Fortune, and how calculations are made).
The current regulations don’t stop League Two clubs from making large losses, or from needing large amounts of cash to survive in normal circumstances, never mind now, in these very challenging times.
They also don’t stop clubs going bust, going extinct or ‘financially doping’ to get success. They simply restrict the ‘excesses’ of clubs.
As I said last time, the EFL working group, which is looking at salary cost control and funding in League Two, was due to give its initial ideas to clubs, and it has now done exactly that.
All clubs have provided feedback. I have stated previously that I expect radical changes to how clubs operate financially in the future, and the initial ideas put forward certainly mean this could be the case in League Two - if they are implemented. The impact on spending could be ground-breaking.
A lot of new ideas are being considered. For instance, some clubs have called for overall caps on total player spending regardless of club income, wage caps on spending for each single player, and limits on squad sizes.
Some of these proposals would restrict the spending of League Two clubs with large incomes, or those with major financial funders or benefactors – levelling out the competition as well as reducing losses and the risk of clubs going out of business. The biggest spenders would be hit hardest if this is implemented. One proposal would see a 30% reduction in total player spending across the whole of League Two at a stroke.
Some clubs would have to halve their spending, and more. For Carlisle United, despite our spending being lower than most in League Two, it could further lower actual spending for 20/21 by another 15-20% compared with 19/20. Almost every club in League Two would need to reduce their player spending.
I think clubs will favour and support very strong action as they face up to the reality of large reductions in income for 20/21 and beyond, as they prepare for the fact there will be a new football world post CV-19.
At the same time the EFL is to bring forward new rules restricting the recruitment of clubs who reach agreements with players to defer wages, and pay them later (currently not paying without agreement may lead to a points deduction). Agreements with players are being made by some clubs and these are being widely reported.
The Academy games programme has ended but the Premier League Academy funding is still continuing in full, as normal, despite almost all Academy staff being placed on furlough. This is very welcome.
Season 19/20
A further meeting has taken place between the group of first-team captains who are representing the players, the EFL and the PFA. They share information and address the numerous questions and practical issues caused by the lockdown which need to be resolved before we can restart 19/20. Many of these issues are about contractual and safety issues.
Critical and central to a restart are the safety considerations. We still have no information on what could be involved for League Two and, therefore, it is still only speculation as to how we will manage that.
You may have read the reports about the potential use of neutral venues to host multiple games and the huge levels and frequency of potential testing of players and staff, not forgetting the PPE requirements. Football cannot compete with frontline medical care for PPE, so sufficient supplies for all are essential. The Police have commented about concerns over mass gatherings of fans.
As each potential solution is proposed, further indirect problems immediately emerge (sometimes as a veil for self-interest), once again demonstrating the complexity and range of issues facing a restart.
League Two is very different to the Premier League in many ways but, in reality, the safety issues for everyone involved are the same, as CV-19 doesn’t distinguish between PL players and staff and League Two players and its staff. There are far less options for solving the safety problems at League Two level.
All eyes are on the Government review of the lockdown this week. The outcome of that will have a major impact on plans for finishing season 19/20 in League Two, the practical reality of those plans and the financial impact.
We are starting to see more and more clubs laying bare the problems they face. Talking to other League Two clubs the outlook is very worrying. Rick Parry, chairman of the EFL, is attending the Government Select Committee today [5 May] to explain the issues the league and its clubs face in this crisis.
We expect another EFL League Two club meeting later this week.
Carlisle United
Loans
One immediate issue for us is the renewal of loan player deals for a possible 19/20 restart. With all loans due to expire at the scheduled end of the normal season (albeit on different dates), we have been busy dealing with these and will be announcing details shortly.
Contracted players
Building on the discussions with the ‘Captain’s Group’ the club is having ongoing discussions with our players about the implications on the game, and the club. With the majority of our players being out of contract in June, they are facing an uncertain period and naturally have worries about their future employment.
We currently have five senior players over the age of 21 contracted for season 20/21 [Nick Anderton, Aaron Hayden, Max Hunt, Omari Patrick and Callum Guy] and seven contracted under-21 club developed players [Jamie Armstrong, Charlie Barnes, Charlie Birch, Taylor Charters, Josh Dixon, Liam Lightfoot and Tom Wilson].
All other players are out of contract.
Usually, in the month of May, we deal with the retained list of players and with offers to out-of-contract players, also detailing those players who have been released.
This season is extraordinary and the EFL and PFA are discussing possible changes to the normal deadline date. We are looking at this as to what is the best timing for our players and the club. We will give further details in due course.
Finances
Last week, we paid April wages and salaries for all staff in full as normal. For all players and staff on furlough we again topped up above the Coronavirus Job Retention Scheme, 80% grant.
We have also now drawn down the EFL loan money and taken advantage of the other government financial help schemes available to us. This is all aimed at helping us to survive the current loss of our income (other than from EFL and PL Academy funding).
20/21 season tickets
The selling of season tickets for 20/21 is a topic which has raised a lot of questions from fans, and we completely understand why that is the case.
We have seen clubs who were selling tickets before the lockdown carry on, despite the uncertainty, and some have extended early buy offer periods. Others have now ceased season ticket sales, as the situation has developed, and are considering the implications of games behind-closed-doors.
We had not launched our 20/21 season tickets details when we went into lockdown, and that remains unchanged.
Our approach is simple, we cannot offer season tickets when we have no certainty whatsoever about 20/21. We don’t know when it will start, when it will end, or when fans will be permitted to watch. The other aspect here is that we don’t know if only a limited number will gain entry initially, or if we will be open to all. If we take cash, use it and then can’t let fans in, the cash may have gone.
All things considered, we feel it is not right to ask for money from fans, even if some want to support us and still buy their ticket as normal. Those offers and that commitment is unbelievable support, it really is, but it would be wrong to take that money, even when it has been offered in this way. We thank you all and, when we know what 20/21 looks like, we will again look at season tickets.
This is a prime example of why we need to resolve the end of 19/20 season, as there are huge issues to plan for and address for the 20/21 season, which will be far harder financially than what we have faced since mid-March.
Finally
Regardless of the actions and support of the EFL, FA, PL, PFA or Government, in order to survive clubs are already taking and planning their own actions. Attempts are being made to agree variations to existing contracts by some clubs.
What we have seen so far is nothing compared to what could be ahead. Player contracts costs represent the significant proportion of club expenses at League Two level, and I see a major shock is coming to the market on new deals. The more damage that is suffered now and the more uncertainty that remains, the larger the future shock will be.
Facing up to these challenges is very difficult as football has traditionally operated outside the normal rules of other businesses. Football has its own rules and regulations, legal system and established customs and practices, all of which have insulated players and clubs from reality, creating a sense of immunity and invincibility.
Events affecting the wider world have rarely been felt be football, until now. Covid-19 means those practices and ‘norms are being challenged – and it might be argued it’s long overdue.
The ability of clubs to carry on and afford to employ players and staff, and what they can pay them, has changed. Our income has gone away at the moment and we don’t know what it will be like in future. If everyone comes together to fix the problems and share the burden, ultimately to get through it, clubs will be stronger, and that will benefit players and staff to protect jobs and aid recovery later.
As you would expect the chairman, shareholders and Holdings Board are seriously considering the implications on the club in the short-term, and for the 1920/21 season, and after.
Meetings and discussions are talking place all the time as the steps to implemented are considered. Operationally we remain in full lockdown.
I am trying to explain the current issues for the wider game, League Two and our club, and everyone connected to it – players, staff and fans – but also point to what lies ahead. I hope you find these updates informative.
Best wishes, stay safe.