Government ready to rescue elite sports clubs facing financial ruin

Government ready to rescue elite sports clubs facing financial ruin

The government is to draw up a substantial rescue package for elite sport after being warned numerous clubs were staring down the barrel of financial ruin because of an indefinite pause in the return of crowds to stadiums.

The hope among sports is that the government will match the £1.57bn bailout it gave to the arts in July – with grants, loans and rate relief all options on the table – although the sum is still being discussed inside Whitehall. However the culture secretary, Oliver Dowden, will make it clear to financially stable sports bodies, such as the Premier League, they must also do their bit by helping teams lower down the pyramid.

While there are optimistic noises for elite sport, the Guardian understands the treasury is far more sceptical about an urgent £500m plea for help to save grassroots facilities and clubs. It means many swimming pools and local authority leisure centres remain under threat of closure, which could cost thousands of jobs, devastate communities and also result in a drop in participation in deprived areas.

Grassroots sport has also been hit by a government announcement that it will extend the rule of six to all adult indoor team sports, which will particularly impact on basketball and indoor five-a-side football leagues.

News of the bailout for elite sports came after the prime minister, Boris Johnson, announced that the “pause” of the safe return of fans inside sports stadiums could last six months, which came as a heavy blow to Football League and rugby union clubs in particular, given that match day revenue is so crucial to their survival.

The situation is even more acute in the National League, which is expected to postpone the start of the season when it meets on Thursday. Teams brought players and staff off the government’s job retention scheme on the basis of the campaign beginning on 3 October, but now have huge concerns about coping without match day revenue.

A small number of Norwich fans attended the Championship match against Preston but the safe return of supporters to stadiums has been paused.

Scott Priestnall, the Yeovil chairman, said he was worried “for clubs not just at our level but League One, League Two and maybe some in the Championship”, adding: “I fear for sport. Every game that is played behind closed doors reduces our income. We get around £80,000 from the National League for playing in their division, but that is not enough money to pay for two of our biggest earners. How is sport meant to survive without supporters?”

The Premier League also expressed its disappointment there would be no supporters in grounds for the foreseeable future, saying it was “certain” that “fans in stadiums will be as safe or even safer than at any other public activity currently permitted”.

“Football is not the same without fans and the football economy is unsustainable without them,” it said. “Last season, Premier League clubs suffered £700m in losses and at present, our national game is losing more than £100m per month. This is starting to have a devastating impact on clubs and their communities.”

On Tuesday afternoon Dowden met representatives from major sports – including football, rugby union and league, racing, cricket and netball – to listen to their calls for a recovery fund. The scale of the problem in rugby union was made clear by Tony Rowe, the chief executive of Exeter Chiefs, who said clubs were in an “absolutely desperate” predicament because of the lack of supporters inside stadiums.

“We’ve got to get bums on seats,” he told the Guardian. “Without revenue we can’t hang on for ever. We’ve been losing a million pounds a month since March and we’re a club who usually never lose money. You can’t keep doing that. If we can get people back in the ground, at least we’ll have something coming in.”

There are also fears inside British Basketball League that some of its clubs will struggle to survive if they are unable to hold games with crowds. Its clubs are holding crisis talks on Wednesday.

Meanwhile the Rugby Football League is forecasting a significant loss of more than £250,000, because the Challenge Cup final on 17 October is now being played behind closed doors. Super League clubs are having crisis talks this week to see how they plan for the Grand Final in late-November without fans. But while most clubs are forecasting missing out on six-figure sums if the rest of this season goes ahead without fans, the hope is they will make it through 2020, largely because of the £16m in government support and loans they were given in the summer.