#008 – Hancock’s Half Hour: is furlough controversy in the Premier League warranted?

I have always been told to open with an anecdote. Whether that was one of my own or another’s was, I felt, irrelevant as they always seem to allow readers to empathise with stories or points that bit more regardless. Regrettably, there is no flash or romance as to how this piece was written but that doesn’t diminish its relatability. I, like so many others, am sat in a dressing gown on a Tuesday afternoon gazing outside wondering when this will all be over and lamenting life as we used to know it. As it always seems to do, football has a strange was of imitating life. 

Football clubs are held in such high regard that it appears they can never seem so emulate the high standards set out for them by the media and fans alike. Footballing opinions are so polarizing that, by their very nature, one group of individuals is always left without an outcome they desire. On a broad scale take the current regime at Manchester United. Fans tired of paying huge fees for underperformers (managers and players alike) so the board bring in a club icon and promise to back him and his philosophy. Then a few poor results later, the same fans that were calling for a manager to be given time are now demanding the head of the ‘Norwegian P.E teacher.’ Fickle or fair? There certainly seems to be an air of ‘damned if you do, damned if you don’t’ with clubs and their decisions. However, in light of the Covid-19 outbreak, certain football clubs made a decision that even the reddest red and the bluest blue could agree on.

Furloughing was a word most of us had likely never come across and even likelier never been exposed to but by April 2020, countrywide there was furlough frenzy at businesses closed their doors for what remains an indefinite period of time. In the UK, businesses can claim up to £2500 per employee per month to keep employees salaried during times of economic crisis such as the one we find ourselves in. This vital pay helps those who have lost their jobs remain economically active and able to afford the necessities of everyday life. In no uncertain terms, furlough payments save lives. As of the day of writing (28/04/20) 5 premier league clubs: AFC Bournemouth, Tottenham, Liverpool, Newcastle and Norwich have all decided to place some of their workers on furlough (with Bournemouth, Liverpool and Tottenham U-turning on their decision.) However, this decision was met with almost wholescale backlash from supporters and ministers alike who claimed the furloughing system was intended for smaller businesses who are unable to remain economically viable while paying staff and not trading. Larger firm organisations such as Premier League clubs should be financially independent enough to navigate periods of economic crisis like these.

Most of the criticism has been levelled at Liverpool, Newcastle and Tottenham all of whom have billionaire owners who, as it is seen by some, have a moral obligation to ensure that the members of organisation at the bottom of the hierarchy propping the rest of it up are taken care of by the club.

One point that must be considered is future transfer fees. Clubs who have used the furlough system should be unable to splash extravagant transfer fees on players come the next transfer window and any attempt to do so should be met with sanctions and backlash for the gross hypocrisy in which it is.

It is crucial to note, just why critics of this action are so outraged in the first place. Liverpool had its vocal critics cite their £310 million wage bill which will be unaffected as player wages are unchanged. This feels like a slap in the face of the administration workers who will be only receiving 80% of a salary which is, on average, 237 times smaller than that of a player. Liverpool also paid agents an estimated £44 million in 2019, expenses like this could be used to aid the most vulnerable in an organisation in the event of a crisis like the one we are in. The same is true for the other premier league clubs and Liverpool can’t be to blame for agents’ fees which is more of a systemic problem in football needing to be addressed.

(Liverpool financial data sourced from David Conn @ the Guardian)

The indignation is also fuelled by the reality that it’s the taxpayer who will end up fronting the cost of the furloughing which is an estimated £40 billion to the government in just 3 months. The public are sick of seeing prominent figures in football be paid astronomically large salaries compared to their own and that coupled with the promise of another decade of austerity measures to help pay for furloughing is a bitter pill to swallow. 

But is all of the criticism being hurled at these premier league clubs warranted?

In short, not really! A fair rebuffing came from West Ham’s Robert Snodgrass who took to twitter to slam the health secretary Matt Hancock upon the release of #PlayersTogether initiative – a fund set up by numerous Premier League players which has helped to raise funds for over 150 charities helping frontline NHS workers. The Athletic’s James Pearce responded to Matt Hancock informing him the players were “always going to play their part.” Pearce highlights are a further issue that the football industry has been scapegoated and used to win over some of the popular vote with the electorate who are not football fans and believe: ‘they all get paid too much’ etc.

This is also true for the players themselves. As previously mentioned, the taxpayer will be responsible for rebalancing the books post-Covid19, but football players themselves are some of the largest taxpayers in the country. They will be paying their way as fairly as anyone else. Snodgrass also mentions how £1 billion in tax and NI payments “doesn’t even earn respect anymore” which seems moderately self-indulgent given the circumstances however he does highlight that the NHS workers are the real heroes, so we can give him a pass!

With the football industry firmly on Mr Hancock’s radar, have other businesses utilising the furloughing scheme sailed by incognito? Indeed, they have. International Airlines Group (IAG) who own British Airways revealed that BA have “furloughed 22,626 employees in April.” To put this into perspective:

BA Profit after tax – £2,091,000,000                           (2018) 

Liverpool FC Profit after tax – £33,392,000                (2019)

(sources: BA financial review 2018, Liverpool FC financial review 2019)

In 2018, British Airways have profits 62.6 times larger than Liverpool’s most profitable year having won the Champions League. Despite this, critics can smell blood and are hounding the football business like it is their sole responsibility to fix, exponentially larger companies are being spared the same disdain.

These same themes hark back to a chapter I read in Simon Kuper and Stefan Szymanksi’s ‘Soccernomics’ (a must-read anyway!) in which they put arguments forward as to why football clubs themselves are relatively small businesses. In 2019, Tesco had revenues of approximately £51.5 billion, per store (6993,) this equates to £7.4 million each (source – Statista.com.) This is in contrast to AFC Bournemouth’s annual revenue of £134.8 million (Source – AFC Bournemouth financial review 2019) meaning Bournemouth is technically as big as 18 Tesco stores. Tesco stores are much larger business, but the same gravity is not felt buying a meal deal as it is celebrating a late winner. 

The problem arises when the size of the business involving football is so huge such as broadcast rights worth around $12 billion. Huge industries are being propped up by the premier league and it’s these industries which should also be held accountable in ensuring the standards of living of the: cleaners, cooks, admin staff, cashiers, stewards, tour guides and anyone who supports a club from the bottom up are not affected. After all, whoever you may be in the organisation, You’ll Never Walk Alone.

Published by georgepitches

I'm an aspiring football writer in my first year of university, studying International Business at the university of Liverpool. As current European champions, there's nowhere more exciting to be a football fan.

3 thoughts on “#008 – Hancock’s Half Hour: is furlough controversy in the Premier League warranted?

  1. You raise some very important issues in your account .I was disappointed to learn of the ‘greed’ of the wealthier clubs such as Spurs and Liverpool when the news first broke but I have come to the conclusion that the question has many facets to consider- some of which you raise in your article. Given that football has been a part of the national scene for almost 150 years, my real worry is for the game as a national pastime and the fear that many “small” clubs will disappear in the present catastrophe. I would not be happy to witness large swathes of our country without representation in the national Leagues. Perhaps one of your future articles could focus on the many implications of such a disaster. Well done, a really interesting read.

    Liked by 1 person

    1. Excellent idea, I am also apprehensive about the future of smaller teams throughout the country and the looming idea of a European ‘Super League’ genuinely scares me! It will be interesting to see how the post-Covid19 situation unfolds. Thanks for the feedback!

      Like

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