OPINION: Economic impact of pandemic could see clubs go to the wall

As the UK and Ireland moved into ‘lock in’ mode this week as a result of the Coronavirus Outbreak the reality of the situation was hitting home to most people.

This is a case of survival.

It is a worrying time for everyone and that includes professional sportsmen whatever their discipline.

In the case of rugby players, the heroes of many supporters, they are simply normal human beings and find it hard just like everyone else to deal with this crisis.

They, too, are working from home and in isolation.

They have lost earnings, just like the staff employed by the Irish Rugby Football Union, having agreed to take a deferral in earnings.

Like others currently, there are the fears of even job losses.

Players who were still negotiating their contracts prior to the outbreak of Covid-19 will find themselves in a sticky situation - this is not a great time to be seeking a job either within rugby or even outside it.

And while the IRFU intends to reimburse the deferred payments, giving the constantly changing picture, they may not be in a position to do so.

The suspension of the Six Nations - Ireland have two games to fulfil at home against Italy and away to France - Guinness PRO14, where there are almost a third of fixtures to be completed, and the European Champions Cup, which had reached the quarter-final stages - has seen rugby shut down - and it is the same in most parts of the world.

There could be multi-million pounds of loss incurred as a result.

As for those who are out of contract at the end of the current season they will likely have seen offers frozen or even withdrawn, they may have nothing on the table and with the expected cut backs, there could be smaller squads in the PRO14, Premiership and Top 14, meaning fewer contracts available.

But it is not just the professional game that is suffering.

The padlocks were already on many of the gates of the 209 clubs across Ireland before the Union announced on March 19 the 2019-20 domestic season had concluded with immediate effect!

It was the right decision but now the clubs are facing their own battles of survival with no regular income - just like other businesses out there, they will hope they can come out on the other side able to continue.

The IRFU this week confirmed they would make half a million Euros (£436,945) available to the club game, although no details had yet been confirmed of how the fund was to be applied.

If you consider there are 209 clubs, it is just over £2000 per club, but there will certainly be criteria applied and those smaller clubs, who perhaps need assistance more, could be left struggling.

Loans in excess of four million Euros have been available to the clubs under the Union’s Financial Assistance Scheme.

A moratorium on all club loan repayments will be put in place for a period of four months, effective from Wednesday (April 1).

This will benefit the 56 clubs with payments outstanding to a value of over €150,000 during this period.

The other advice from the Union is for clubs to draw on any Government assistance available to them.

The Union is to be applauded in attempting to reach out to the grassroots, but it may still not be enough to see some of them through this period and like several businesses, it will not be surprising to perhaps see some clubs go to the wall.

That will not be as a result of not having gate and bar receipts, but a lack of sponsorship.

The very businesses who support the clubs in sponsorship have had to close their doors as well as a nation looks to save lives and reduce the spread of the disease and when it is all over, some may not return.

The loss of jobs in those firms is more impactful than being able to support the local sports club, but it is the reality for the clubs who have relied on it.

In England, the RFU announced a funding package of £7million to provide support for clubs below the second tier Greene King IPA Championship, including £5million in loans - those figures reflective of how serious the situation is.

And while there were 25 per cent wage cuts agreed by many of the top tier clubs in the Premiership, it has been met with some opposition.

Premiership clubs were confident the salary reductions would safeguard them against grave financial problems provided there was a resumption of the league in September.

The Premiership clubs had asked players and staff to take the 25 per cent reduction during the suspension of the league, and while it cannot be enforced it seemed most were willing to do so given the graveness of the situation.

However, it has since emerged that some players who may find themselves out of contract at the end of the season may consider a legal challenge to the proposed cuts, believing it to be a breach of contract.

It may be understandable, but in contrast, Juventus football players and their manager have agreed to waive four months’ wages (approx £80million) to help the club’s finances during the pandemic - Italy as a nation having been hit particularly hard.

A challenge from some players in the Premiership will be frowned upon given the crisis gripping the nation, and I can say that with authority given I myself will be an unemployed freelance journalist as from today - these are the times we live in and many others are affected in the same way.

The professional clubs in rugby and football are holding out hope that there may be a resumption, of sorts, to the current seasons, the reality may be the 2019-20 campaigns could effectively be written off and uncompleted.

The domestic clubs’ cricketers may not even get a ball bowled in the 2020 season.

In the bigger picture, given what some families have already suffered, there are more important things to focus on.

Stay at home (for those who can), stay safe, stay well and follow the advice being offered.