Coronavirus ‑ Football, Fans, Finances and Furloughs

By Peter Moane

As the news of Liverpool’s decision to furlough non-playing staff came in for criticism, the club took a swift u-turn, with Chief Executive Peter Moore stating, “we believe we came to the wrong conclusion last week and are truly sorry for that”. Spurs, after a week of intense criticism for placing 550 staff on furlough, reversed the decision on Easter Monday and have opened their stadium as a COVID-19 test centre. On Tuesday, Bournemouth also announced a reversal of their original decision to furlough their staff after the club “listened to our supporters”. Other Premier League Clubs, however, such as Newcastle, Norwich and Sheffield United, have placed staff on furlough, which allows clubs to keep staff employed, but the UK government will cover up to 80% of their monthly wages up to £2,500 a month.

The public reaction to these decisions brings to light the complexity and precarious nature of football clubs, and their role in what is ‘right’ to do during the COVID-19 pandemic, bringing new reputational challenges. Each decision may have a profound impact on a club's reputation to its key stakeholders, including supporters, the local community, the media and the broader public eye. It is imperative for clubs to think about their reputation during this time, and how their actions now will impact this in the future.

Short term loss for long term reputational gain

For a club entrenched in the philosophy of Bill Shankly, with a club anthem of You’ll Never Walk Alone and a club motto of ‘This Means More’, Liverpool’s decision has flew in the face of their philosophy and a growing likeability factor and global reputation for a cost-cutting measure worth up to £1.3 million a month. Liverpool are the world’s 7th richest club earning a pre-tax profit of £42 million in 2018/2019. In the case of Spurs, they are the 8th richest club in the world, with Daniel Levy earning £7 million last season alone, and having an owner worth £4.3 billion.

To compare to their rivals, Manchester United has committed to paying is 900 staff in full for the duration of the Coronavirus pandemic, along with neighbours Manchester City. United are also looking into ways its staff could help in the local community. As the two Manchester clubs received praise for their actions, Liverpool and Spurs were hit with heavy criticisms by former players, supporters across the country and the media.

The decision of clubs to prioritise short-term financial gain has resulted in serious reputational damage to their key stakeholders, particularly supporters. It is important for clubs and businesses alike to be conscientious of the possible moral cost of pitting financial savings against the values and philosophies which are key pillars to their reputation.

Players can play as much of a role off the pitch as they do on the pitch

Footballers have a reputation for being overpaid for their profession. However, as UK Health Secretary Matt Hancock quickly found out, beating footballers with a moral stick can be detrimental. A proposed pay cut, such as the 30% cut initially develop by the Premier League, would have provided less funding to the tune of £200 million to the NHS, but players up and down the country have already gone above and beyond in playing their part.

Football players have been ringing up older and vulnerable supporters to check in on them while they are in isolation. Liverpool players have been doing great work in their local communities. Players have contributed to foodbanks, both in the city and their home communities, and donated privately to Alder Hey and Liverpool Women’s Hospital. Norwich, a club who have made use of the furlough scheme, have players and staff deliver food to supporters and call elderly and vulnerable supporters to help with their self-isolation. Wolves players have been sending birthday wishes to people celebrating their birthdays in isolation. There are various examples of players playing their part in the community during this time up and down the country throughout the football pyramid. On Wednesday, Premier League players came together and announced their #PlayersTogether initiative which creates a collective player initiative and partnership with NHS Charities Together to generate and distribute funds to help battle the COVID-19 pandemic.

For a football club, players are their most important and public-facing employees. As players continue to positively contribute to both the club's supporters, the local community and to wider society, they are as important to their club off the pitch as they are on it in maintaining a positive reputation in these testing times. As clubs continue to face difficult decisions, their players can continue to be role models both for themselves, and the team they represent.

A changing of the landscape

In reversing their decision, Liverpool Chief Executive Peter Moore’s letter to fans brought about a pertinent and somewhat worrying statement for football clubs across the UK and beyond: “But in the spirit of transparency we must also be clear, despite the fact we were in a healthy position prior to this crisis, our revenues have been shut off yet our outgoings remain. And like almost every sector of society, there is great uncertainty and concern over our present and future.”

Football clubs are businesses trying to find ways to save money in a time of great uncertainty, like businesses in industries up and down the UK, and football is a particularly precarious industry. Although there are other ways Premier League clubs could have gone to ease operational costs instead of using the UK’s furlough scheme, football clubs across the UK face extreme financial uncertainty, and they must be remembered as a business.

The Premier League could lose up to £1 billion. Most of the 92 Football League Clubs and beyond are struggling to survive during this period with their main revenue from match day now at a halt. The EFL and PFA have recently agreed a 25% wage cut for players in League One and Two, and both groups will come together to seek to establish a common ground to help clubs through the crisis. In the Championship, an Independent piece by Mark Critchley brought the spotlight on the ‘broken model’ of the league which could see multiple clubs lost. When the model is to pay more on wages than income for a statistical one in seven chance of gaining promotion to the Premier League, the gravity of the situation higher up the football pyramid is laid bare for all to see.

Football Association Chairman Greg Clarke has mentioned the possibility of losing clubs and even whole leagues to the pandemic, “We face the danger of losing clubs and leagues as finances collapse. Many communities could lose the clubs at their heart with little chance of resurrection”. These comments amplify the truly extraordinary times football is in, and the difficult decisions which are facing clubs up and down the UK. As hubs of communities, and as businesses, clubs will face many difficult decisions which may impact more than just their reputation. But for those who weather the storm, what they do now will leave a lasting impression.

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