A lot of backlash out there for Liverpool and Spurs right now. They seem to be pushing ahead with furloughs of their non-sport workers. There are a lot of questions as to what makes an organisation prime for tapping into the precious government funds. It’s a murky question with a lot of grey, so it’s not surprising that the government didn’t have this sorted before they jumped into announcing the scheme.
Here are some of my thoughts that shine a light on the muddy situation that should or could be used to deny clubs the privilege.
1. Furloughing workers before attempting to redistribute salaries from front office workers
Liverpool and Spurs don’t appear to have attempted to course-correct their business model to support the back office team. Liverpool has a wage bill of £31om a year, it’s a top 5 in the world number. That’s £6m a week. They have furloughed 200 staff. Let’s be generous and say the average salary of those back-office staff was £50,000 a year, which would be staggering for that area of the country, that’s £10,000,000 year, which works out at £192,000 a week.
Liverpool would have to shave 3% of their top earners to cover the bottom 200 on a made-up, hugely inflated average salary for their current furloughed workers.
This sort of ask in the real world would not go through a union. It’d be mandatory. Big companies in the private sector are trying to redress the balance. Mandatory pay cuts are often tiered and quite often don’t kick in until you hit a certain threshold of salary. Big earners take a bigger hit. At the biggest companies, some execs are totally foregoing their pay in its entirety. Major corps are all moving to the socialist wage structure Wenger dreamed of. Why? Well, no one wants to be savaged in the press and actually, quite a lot of leaders are demonstrating a social conscious right now.
Football fans would feel a lot better about players and clubs if they instituted this right now. No debate. No asking the media to make our you are being bullied. No grotesque excuses like ‘by paying me my millions, you’re actually saving lives.’
2. Any club dishing out performance bonuses
Daniel Levy has a bonus coming this year that was deferred from last year. If you’re paying out massive bonuses right now, you are clearly in good enough shape to not need government help. It’s difficult to call deserved bonuses greed, but in if you’re pleading poverty, then doling out bonuses 136x the median wage of the average Brit, you don’t deserve a subsidy from the taxpayer. Remember, a £3m bonus is nearly 16 weeks of 200 people on £50,000 a year.
3. Clubs with tax exiled owners
Looking at Spurs here. Though this notion is grounded in something real, it’s not the fault of the everyday worker how their owner pays their taxes. That’s why the Richard Branson thing is very tricky, do you punish 8,700 Virgin Atlantic workers because their boss doesn’t pay tax? That’d cause an incredible amount of suffering for a finger-wagging exercise.
4. Clubs with big cash positions.
The Swiss Ramble has the Premier League down with a total cash pot of about £1b.
In such an environment, cash is king. The Premier League clubs have just over a billion, but worth noting that £700m of this is at just 4 clubs: #MUFC £308m (now down to £101m at half-year), #AFC £167m, #MCFC £130m and #THFC £101m. Other clubs have much less, e.g. #BHAFC £1m. pic.twitter.com/hb3sjXucjk
— Swiss Ramble (@SwissRamble) March 24, 2020
Seems quite obscene to dip into furlough subsidies before you worked through that rainy day fund, right? Well, clubs could argue that those funds are waiting to see if they have to absorb a TV money refund if the season gets cancelled. Also, that cash pile isn’t evenly distributed. Manchester United are far more capable of weathering the storm than Bournemouth because they are a cash/money beast. However, all businesses want to be treated fairly, is it fair to ask United to pay out of their cash pile, but let Liverpool off the hook? Can you really punish clubs that planned well?
It’s a complicated question, which is why you have to rely on execs to make the correct ethical decision. In Germany, there’s more of a tie to the social contract the German people have with the game, so their clubs are acting in selfless ways. Their owners want to help. Liverpool’s Fenway Group bombed off the workers at the first opportunity, which runs counter to how they’ve behaved in the states where they own Boston Redsox and have donated $1m to the hourly workers. That’s about $770 for each of their 1300 staffers. Why? Was it league pressure? Or the fact that these execs aren’t going to get flack on their Virtual Country Club Cocktail Hours for stiffing Liverpool staff, but they’d get it in the ear for doing unethical things in their home town?
Who knows, it stinks regardless.
So there you have it, a splodge of grey to work through. My conclusion is that a lot of the decisions on how to work through this situation will be dependent on the ethics of the owners. Hopefully more clubs behave like Arsenal, United and Manchester City, we’ll see though, we’ll see.
Let me know YOUR thoughts in the comments.
UPDATE: Liverpool caved to some good old social shaming. Too fucking right.
P.S. Talking of supporting your own, Hammerton Brewery of North London need your support. They are basically asking you to drink beer and eat meat to support a local business. Go to their site here and order below.
We are still offering 10% off this week and have also added more locally cured meat from our friends @CobbleLaneCured Thank you all again for your amazing support over last few weeks🙏 #supportlocal https://t.co/bXZr640tsf pic.twitter.com/mpQy421VB5
— Hammerton Brewery (@HammertonBrew) April 2, 2020