Coronavirus: Rick Parry says EFL clubs face £200m financial hole
Parry says the EFL still expects three clubs to be promoted from the Championship to the Premier League
Last Updated: 05/05/20 3:37pm
English Football League (EFL) chairman Rick Parry has warned that clubs face a £200m financial hole by September.
The former Liverpool chief executive also targeted a "proper reset" as he gave evidence to the Digital, Culture, Media and Sport Committee (DCMS) on Tuesday about the impact of the coronavirus pandemic on sport.
Parry said the aim of the league remained to resume play when it was safe to do so, but he acknowledged playing games behind closed doors could actually be a loss-making venture for some clubs.
He admitted it was "difficult to answer" how many clubs might go out of business.
"We would like to emerge stronger and leaner, with a proper reset post-COVID. We are heading for a financial hole of £200m by the end of September," Parry said.
"Clubs are stacking up creditors and there are a great deal of uncertainties."
Parry said he hoped players would be willing to take pay cuts despite previous resistance.
He said the EFL was on board with the PFA's appointment of financial services firm Deloitte to look at clubs' books to assess if there was genuine need for a club to be deferring wages.
"We all need to share in the pain," Parry said.
"We are really having an open-book policy, and we are going to show [the players] how deep the pain is. We are absolutely on board with the Deloitte process."
Parry described parachute payments to clubs relegated from the Premier League as "an evil that needs to be eradicated".
He said the EFL still expects three clubs to be promoted from the Championship to the Premier League.
There have been reports that top-flight clubs want to play out the season with the threat of relegation removed, but Parry said it would get very "messy" if that happened.
"We expect three Championship clubs to be promoted - the Premier League are aware of our position on that. The Premier League expects three clubs to be relegated," he said.
Asked what would happen if the Premier League's position changed, Parry added: "There would be a degree of outrage from a number of clubs in our Championship, and it would be a breach of the tripartite agreement.
"The safe answer is that it would get very messy. Our expectation is there would be three clubs promoted from the Championship."
ECB fear £380m loss in 'worst-case scenario'
Also giving evidence to the DCMS was England and Wales Cricket Board chief executive Tom Harrison who said the impact of the pandemic could cost his organisation £380m.
"We are still working out the impact of Covid-19," he said. "We anticipate with no cricket this year a worst-case scenario could be as bad as £380m.
"That would be the loss of 800 days of cricket across all of our professional clubs and the ECB. That is the worst-case scenario for us this year."
There will be no professional cricket before July, but Harrison remains hopeful of fitting in a "significant" number of Test matches.
England are due to play West Indies and Pakistan at home this summer.
He added: "With a following wind hopefully will be able to play a significant number of Test matches this summer which will helps us mitigate those financial losses that we are facing at the moment."
Sweeney: 'Catastrophic' if Rugby does not resume before 2021
RFU chief executive Bill Sweeney says the governing body will lose £107m if the autumn internationals in November are cancelled.
He said: "If the autumn internationals go ahead in November, which are key for us, we will still lose £32m in revenue.
"If they go ahead but behind closed doors that is a negative impact of £85m and if they are cancelled entirely that will be £107m on top of the £15m we have already lost.
"So it is a very significant loss of revenue and we are doing what we can to mitigate it."
Asked what the impact would be if rugby was not able to restart until 2021, Sweeney did not skirt around the issue.
"That would be catastrophic, 85 per cent of our income comes from hosting men's international games at Twickenham," he said.
"Twickenham is a major asset for us. When you own a stadium it is a major cost and at the same time brings in large revenue.
"If this was to be prolonged and the Six Nations games were impacted, then it would be a catastrophic impact on rugby union in England. We would be looking at some very severe situations."
Analysis: Rick Parry in no mood to sugarcoat plight of EFL
By Geraint Hughes, Sky Sports News reporter.
Select Committee hearings can at times be dull affairs, conversely they can be fascinating. Rick Parry's evidence to a committee that is looking into the impact of Covid-19 on sport fell into the latter category.
The MP's asked direct questions and in the main Rick Parry gave very direct answers. That's not always the case!
Parry wasn't in the mood to sugarcoat the plight the EFL finds itself in, in fact early on during his evidence he said that the EFL business model wasn't great before the virus and that maybe it will be shocked into finding a more sustainable model in a post-Covid-19 world.
That came after he told MPs the EFL would have a £200m cash hole come September due to the crisis, while placing on record that his "objective was to not lose any clubs" during this turbulent economic period. Salary caps and smaller playing squads would have to be a logical step.
He also made a plea to MPs to pressure the various working groups looking at how sport can restart to get some guidance on when their seasons can restart in terms of "days".
Parry was at pains to point out that while working groups were looking at 'return to training' proposals, the EFL needed 'return to playing' proposals and quickly.
He made it clear the EFL needed to end by July 31 and that clarity was needed as many EFL clubs had placed staff on furlough so it would be wrong to bring them back to work only for the season not to be completed.
Regarding whether the season can or can't be completed, Parry's comments about promotion and relegation were very candid.
He told the MPs that he expected "lawyers to be busy" in the event that the season wasn't finished, but that he expected the tripartite agreement with the Premier League to be honoured and that three Championships clubs would be promoted.
Parry refuted a suggestion from Phillip Davies MP that the EFL needed a "bailout" from the Premier League saying instead that the EFL required a rescue package. How those discussions were progressing, Parry would not elaborate although his dislike of the Premier League parachute payment was pretty clear as he called it "an evil that needs to be eradicated".