The Government announced on Thursday its plans to provide up to £300million of financial support to bodies across various sports which have been adversely affected due to the coronavirus.
With many sports bodies – particularly those whose revenues are largely dependent on gate receipts – truly struggling to remain solvent, and with their longer term futures in doubt, the package will be a welcome and much needed one – for those who are eligible. A number of sports, including cricket, swimming and table-tennis, have not currently been allocated funds under the scheme, and whilst they may receive government support in the future, clubs participating in those sports will, in the short to medium term at least, need to consider alternative funding options.
It should be noted that the funds being allocated under the scheme are not grants: they will be 'largely composed of loans' which will eventually have to be paid back to the government. Despite the fact that these loans are likely to be on favourable terms for bodies receiving them compared to standard commercial loans, they will still have long term impacts on clubs’ finances and public investment into sport generally. There will be questions raised as to whether the scheme may be a catalyst for more direct intervention by the government into the governance of sport. If governing bodies deem that there are too many ‘strings attached’ to the loans then it may well be the case that they prefer to seek funding from elsewhere, such as private equity where it is available.
Specifically considering football, whilst clubs in the lower tiers of the National League will be eligible to receive the loans, Premier League and English Football League clubs are excluded. This will most certainly increase the pressure on football stakeholders to agree a funding solution which has been discussed for a number of months without any terms yet being agreed by all parties.
For EFL clubs that may feel hard done by being excluded from the package, our expert sports and restructuring teams have recently combined to identify a series of measures to assist EFL clubs on the road to recovery and to create a bridge to a sustainable future. For further details on this initiative, please see our report here.
In summary, whilst this scheme will no doubt be of great assistance to English sports as an institution, those sports that have been excluded and whose clubs are in desperate need of support will now have to urgently consider private funding options (and the demands from that sector in terms of control). Finer details of the funding package are also eagerly awaited in order to understand the availability of such funds and what, if any, influence the government will be seeking in sports that engage in the scheme.
"Sports clubs are the beating hearts of their communities, and this £300 million boost will help them survive this difficult winter period." Oliver Dowden - Secretary of State for Digital, Media, Culture and Sport