Sunderland co-owner Charlie Methven teams up with MP to produce blueprint urging Government bailout to help support EFL clubs from going under

Sunderland co-owner Charlie Methven has helped produce a blueprint alongside MP Damian Collins that calls on Government support to help protect clubs in the EFL from going under due to the coronavirus pandemic.
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The Government must underwrite a new body to protect clubs in the EFL, the new report says.

EFL chairman Rick Parry warned earlier this month that the 71 clubs in his competition were facing a collective £200m cash hole by the end of September, primarily due to the loss of matchday revenue this campaign and uncertainty over when or if supporters might be able to return next season.

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Clubs in League Two are moving towards curtailing the 2019-20 campaign because of the costs involved in continuing playing without fans in attendance and of Covid-19 testing.

Former executive director Charlie Methven.Former executive director Charlie Methven.
Former executive director Charlie Methven.

Charlie Methven, the co-owner and former executive director of League One side Sunderland, and the MP Damian Collins, formerly the chair of the Digital, Culture, Media and Sport (DCMS) committee, have produced a blueprint called 'A Way Forward For Football'.

It sets out a six-point plan which includes the establishment by the Football Association of a Football Finance Authority (FFA), financially backed by the Government, which would provide funds to keep clubs affected by the pandemic afloat.

Rather than a loan, the report says, these funds would be exchanged for a minority shareholding of up to 49 per cent. The funding could only be used to meet short-term liabilities and create breathing space to restructure finances, rather than on the recruitment of players or improving infrastructure.

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An independent director, chosen by a registered supporters' trust or local government authority, would join the board of the club to represent that shareholding, and then either the supporters' trust or local authority could acquire the shareholding at a discount to market value at some point in the future.

Collins has warned an urgent and substantial Government bailout is needed for clubs in the bottom two tiers of the EFL otherwise several could go into administration within weeks.

He told Sky News: "In the next few weeks we could see five to 10 EFL League clubs going into administration

"We saw the outcry last summer when two clubs, Bury and Bolton were in trouble. If that happens there will be huge public demand to do something, without Government stepping in, those clubs could go to the wall and there may be others that follow.

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"Yes it be would be nice if football could help itself, but it won't be able to do it.

"I don't think there is a body able to stump up the cash needed… it requires leadership from the government here. They need to offer a stake in the clubs, as it's a community asset. Those stakes could be bought by Trusts and local authorities."

The blueprint says the FFA should set and enforce the EFL's financial regulations, and that the FFA should feature representation from the EFL, the Professional Footballers' Association and the Football Supporters' Association.

"Without the reforms of the governance of football finances, any bailout for clubs will be a short-term fix," Methven – who has a 6% share in Sunderland AFC – and Collins wrote.

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"Once the pressure is off, the rules - whatever they are - will be bent and challenged by the owners of clubs intent on short-term success, at the cost of medium-term sustainability."

Former FA chairman Lord Triesman said: "Damian Collins and Charlie Methven have clearly devoted considerable thought to the financial and social crises facing football.

"They have identified some very practical routes through to a more secure future and I welcome this wholeheartedly. It is a pity that football so seldom does the work needed itself. But it doesn't. This is therefore an especially important intervention."

The PA news agency report clubs in League One and Two have been sent proposals for a salary cap.

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Parry said such a cap was "absolutely essential" when he addressed MPs at a DCMS committee hearing earlier this month.

A DCMS spokesperson said: "We are in regular, ongoing discussions with the EFL and other football authorities on the impact of coronavirus, how the professional game could safely return and how the wider football family could be supported."

In Methven and Collins’ open letter, the six-point plan advocates:

- A 'Football Finance Authority' (FFA) scheme should be created by the Football Association - but working with and backed financially by the government - to provide financial assistance to EFL clubs.

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- Funds should be provided by the FFA to allow clubs to meet their short-term liabilities and provide them enough breathing space to restructure their finances, but couldn't be used to invest in recruiting new players or improving the club's infrastructure. Rather than being offered as loans, these funds would instead be exchanged for a minority shareholding in the club, of between 10 per cent to 49 per cent, depending on the level of investment required and the value of the club.

- Independent directors would be appointed to the boards of clubs as representatives for this minority shareholding. These directors can be nominated by either a registered Supporters Trust or by the relevant local government authority, but they must be non-political and subject to approval as 'Fit and Proper' by the FFA.

- These Independent Directors shall have real-time access to the financial records of their club and can report their concerns back to the FFA. Clubs that continue to trade outside the rules of the EFL would be put into a form of administration by the FFA, where a credible plan would be implemented by independent auditors to bring the financial affairs of the club back in line with the League's rules.

- Either a recognised Supporters Trust or a local authority can subsequently acquire the FFA shareholding in their club at a discount to market value, and funds raised in this way would be returned to the government to help repay the public investment in this scheme.

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- The EFL's financial regulations should be set and enforced by the FFA, the governing body of which should include representation from the EFL, the Professional Footballers Association (PFA), the Football Supporters Association (FSA) and the clubs themselves, but with an independent majority.