How will the football teams in Scotland cope with the enforced suspension of the seasondue to the COVID-19 pandemic and the subsequent effect it has had on their cash flow.
Much has been said and written about the way the Scottish clubs have gone about it. Heart of Midlothian were the first to come out with a plan, with their draconian 50% cut in all staff (but still keeping every employee over the living wage), while Aberdeen and Hibernian have talked about deferral of wages. Livingston and Ross County have said that they will pay their staff full wages for the duration of the pandemic. Hearts reacted before the governments offer of furloughing staff, which has led to a change in their outlook for their non-football staff, while Ross County and Livingston, have lower footballing side salaries, so should be able to absorb the top up of their players salaries with the 80% offer (up to £2,500 per week). The only potential concern would be that to gain the financial assistance, none of the players would be allowed to do any directed training from the clubs or use any club facilities during this time, and whether they would be able to continue with the full payment, if the absence of football is seriously extended.
The two approaches of Hearts and Hibs/Aberdeen are quite divergent, both could be absolutely fine, but this depends on the scenario for the completion of the season 2019-20.
What I feel is needed is direction from the top of the game form the SPFL / SFA.
If they could guarantee that all matches would be completed, the majority of the income that the clubs would normally get would become available albeit later than would be normal. If this was the case, the decision to defer the wages, and pay them at a later date could be absorbed. Even if at the moment they cant guarantee the end date, if the clubs knew they had x amount of games left to play, and that the full allocation of broadcast income was forthcoming, they could budget sufficiently to pay the deferred salaries. As Hibs have stated, the deferred payments would be paid in December 2020 and Summer 2021. If all games have been played and the new season started they will be able to cover this deferment. If not, then they may have cash flow further down the road, especially of the suspension only ends towards the end of 2020.
If the season is ended with no more games being played, the impact of deferring the wages might come back to bite the clubs that have gone down that route. That is probably the reason that Ann Budge (Chair of Hearts), went down the route of the 50% cut. She could have (and still could) invoke Article 12 of the players contract. Article 12, which many players and clubs seem unaware were a stipulation of contracts, means that if the game is suspended, it is within the clubs right to suspend the players pay until which time that the game returns from suspension. And this to me is the crux when it comes to the different scenarios that may occur to end the season.
If the season is called now, either null and void or as it stands (this is not a blog about this), the clubs that are deferring payments may just be kicking the can further down the road. The deferred payments would still be required to be paid, but the income stream that was lost would not be there, whether it be broadcasting money / sponsorship /match day income, so the funds to pay the deferred salaries would not even there.
When you look around Europe, many of the top teams have taken drastic actions in response to the potential financial crisis. Barcelona players are taking a 70% cut, Juventus players are taking no wage at the present time, while Sion have sacked nine players that refused to take a pay cut.
There does not seem to be a consensus as to the best way to approach the financial concerns at this unprecedented time. When you look at what has happened to most of the non-league football in England, with the season being written off and no relegation and promotion, it is not clear what will happen. Nantwich Town of the Northern Premier League which is a well run not for profit club (www.nantwichtownfc.co.uk/club-statement-covid-19-update) have had to let all their staff go. While the players were Part Time, they had day to day staff that they had to let go, though no fault of their own, yet they will still have overheads and maintenance with no income stream.
At least the authorities have made a decision on the season, though the clubs are not impressed with the selective decision considering the leagues directly above in the non league pyramid is only suspended indefinitely.
This is where the Scottish Football authorities need to make a decision. It is then, and only then that the right course of action can be taken by the clubs, and whether the Hearts or Hibs/Aberdeen route is the best course to follow. I think many clubs are waiting for this decision before showing there hand. The sooner the decision is made regarding the rest of the season is concerned the sooner clubs can plan accordingly for the future, because if they get it wrong, it may be a burden for many seasons and years to come.