Doncaster Rovers: Government urged to prepare bailout package for League One clubs as MP warns some will enter administration 'within weeks'

The government has been urged to consider an urgent bailout for clubs in League One and Two in order to prevent them from collapsing into administration.

By Liam Hoden
Friday, 22nd May 2020, 1:28 pm
Updated Friday, 22nd May 2020, 1:28 pm
EFL
EFL

Conservative MP Damian Collins - the former chair of the Commons Select Committee - and Sunderland co-owner Charlie Methven have produced a six-point plan designed to ensure clubs emerge from the coronavirus crisis still in business.

And key to the plan is a financial bailout deal from the government, which Collins believes is desperately required as soon as possible.

"In the next few weeks we could see five to 10 EFL League clubs going into administration,” Collins told Sky Sports News.

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"We saw the outcry last summer when two clubs, Bury and Bolton were in trouble. If that happens there will be huge public demand to do something, without Government stepping in, those clubs could go to the wall and there may be others that follow.

"Yes it would be nice if football could help itself, but it won't be able to do it.

"I don't think there is a body able to stump up the cash needed… it requires leadership from the government here.

“They need to offer a stake in the clubs, as it's a community asset. Those stakes could be bought by Trusts and local authorities."

Collins and Methven’s plan is entitled ‘rescue football and protect community assets for future generations to enjoy.’

It suggests the following:

- A Football Finance Authority to be created by the FA but working with and backed financially by the government, in order to provide financial assistance to clubs

- Funds would be provided by the FFA to help clubs to meet ‘short term liabilities’ and provide time to restructure finances. It would not be used to sign new players or improve infrastructure.

- Funds would not be loans, but rather exchanged for a minority shareholding in the club of up to 49 per cent.

- Independent directors would then join the boards of clubs as representatives for the minority shareholding. They could be nominated by a registered supporters trust or local authority but would need to pass ‘fit and proper’ testing and be non-political.

- The would also have access to club financial records and be able to report back to the FFA.

- Clubs that continued to operate outside of EFL financial rules would be put into a version of administration governed by the FFA where a plan would be formed to ensure the club fell into line.

- The minority shareholding would then become available to purchase at a discount rate by either a recognised supporters’ trust or local authority. Funds raised from the sale would be returned to the government.

- The FFA would enforce the EFL’s financial regulations. The governing body of the FFA would include representatives from the EFL, the Professional Footballers’ Association and the Football Supporters’ Association, along with clubs themselves, while ensuring an independent majority.

Collins said it would be imperative for any bailout to come with restrictions in order to ensure clubs made alterations to the way they are run long term, rather than using the cash merely as a short term fix.

The government has already announced a £16m financial package to aid Rugby League through difficulties which arise through the shutdown of the sport due to the Covid-19 pandemic.

Football Supporters’ Association chairman Malcolm Clarke has backed Collins and Methven’s suggested plan.

He told Sky Sports: "The necessary restrictions arising from the COVID-19 pandemic have made government support for football clubs - a vital part of our communities and culture - an urgent necessity.

"We welcome the call for that assistance to be both prompt and linked to future sustainability.

"Football now has a unique opportunity to reset and adopt new ideas, which not only secure the short-term future of clubs, but help them thrive in the seasons ahead.

"These proposals would be a huge step in the right direction and chime with the FSA's core beliefs - that fans have a key role to play in football governance and ownership models.

"The idea of an independent unit, embedded within the FA, which exists to protect clubs is an idea we've championed for some time. It receives our full support."

The EFL have yet to comment on the plan but have been working on their own proposals for the manner in which clubs should operate in the future, including the introduction of a wage cap.

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