With the exception of a few trials, it has been six months since spectators were allowed into stadiums to watch live sporting events. The days of packed stadiums seem a distant memory and the sporting community had, understandably, been eagerly anticipating 1 October when fans were set to return. Sadly, due to an increasing number of Covid-19 cases, the UK Government announced on 22 September 2020 that its plans for fans to return to live sporting events will be “paused” for up to six months.
Impact on British sport
This is a major setback for British sport, as many clubs, particularly football and rugby clubs, rely heavily on matchday revenue. For example, the Premier League has warned that last season its clubs “suffered £700m in losses and at present [the] national game is losing more than £100m each month”. This means that, if fans cannot return to stadiums for another six months, football clubs across the country are set to lose a further £600m.
Some clubs are already starting to feel the effects of Covid-19 and the resulting lack of ticket sales. Macclesfield Town Football Club, a club which had been running for 146 years, were wound up in the High Court earlier this month, with debts totalling more than £500,000 and an outstanding tax bill of £190,000. The fear following the Government’s latest announcement is that other clubs may start to follow in Macclesfield Town’s footsteps.
It isn’t just the sports clubs themselves that are affected by the ban on fans. When sporting events are held behind closed doors, it has an impact on stadium staff and the economy (both locally and nationally) too. For example, with no fans in attendance, fewer stadium staff (such as stewards and hospitality staff) are required. Some clubs have already made job cuts to account for this and the longer fans are prohibited from attending events, the more job cuts we are likely to see. A lack of spectators at sporting events also has a knock-on effect on the economy as fans aren’t visiting local cafes, pubs and restaurants before or after the match, nor are they using public transport to travel to and from the game.
There may be support on the horizon, however, as eight elite sports (including football, rugby union and cricket) look likely to be helped by an urgent Government rescue package. The detail and scope of the package is not yet known but talks are underway and, following a meeting with senior figures from British sport this week, the Culture Secretary, Oliver Dowden, has vowed to help.
The Government is also considering a separate £500m package to support grassroots facilities and clubs, which have seen a considerable drop in income and a significant rise in costs as they have sought to make their facilities “Covid-secure”.
What can clubs do?
Whilst we await confirmation of any Government backed rescue package, there may be other avenues clubs can look at to recoup their losses, such as:
- Re-negotiating contract terms - If clubs aren’t able to perform their obligations under a contract because of Covid-19 or the ban on fans attending events, or if they aren’t receiving the benefit they expected from a contact, it may be possible to re-negotiate or terminate that contract.
- Seeking compensation from their insurers - Depending upon the terms of the policy, clubs may be able to recover some of their losses from their insurers. This is especially so now that the High Court has ruled that the majority of businesses with Business Interruption Insurance who were forced to close because of Covid-19 should be entitled to compensation.
Football is not the same without attending fans and the football economy is unsustainable without them.