“All Options Should Be On The Table” – Should The Government Support EFL Clubs Through The COVID Era?

A topic high on everyone’s lips involved in sport in the UK recently has revolved around how sport, and particularly, must overcome the Covid period. Football clubs below the Premier League have been suffering drastically, so Fantastec’s Steve Madincea gives his views on the issue here.

Managing the finances of a lower league club can be a difficult affair at the best of times. Recently, we’ve witnessed historic names such as Bury F.C, Bolton Wanderers, and Charlton Athletic all fall upon hard times. Now, the Coronavirus pandemic is wreaking devastation across the footballing establishment, with matchday revenue absent and showing no sign of an imminent return. 

The last few weeks have been fractious within the footballing industry as clubs look for ways to shore up football’s future. The question of who foots the bill for the present revenue black hole in the world of football is now a heated debate – is Government support needed, or must the Premier League provide financial help?

Those arguing the Premier League need not provide support are assuming football mirrors any other business – but the Premier League does not exist as a vacuum.

But many lower league clubs do not have time to sit back and watch the argument play out. As many as 60 clubs are estimated to be at risk of going out of business. The EFL says it stands to lose £200m due to the absence of matchday revenue and crowd spend this season. So, what action needs to be taken, and by whom?

Is it the duty of the Premier League to act? 

Lower league teams lack the commercial sponsors and big broadcast deals of the top teams, and so are being hit hardest by the loss of matchday revenue which forms a greater part of their annual revenue. The Premier League’s most recent rescue offer provided nothing for the Championship and was rejected by the EFL for being nowhere near enough. 

Those arguing the Premier League need not provide support are assuming football mirrors any other business – but the Premier League does not exist as a vacuum. Lower league teams are integral in feeding talent through to the top, while the loan system enables young players to gain experience and cut their teeth before making it big.

The Premier League is also renowned as one of the most competitive leagues in the world, and this relies on the premise lower league clubs can break through.

As one example, Harry Kane earned his stripes playing for Leyton Orient and Millwall long before becoming a star in the Premier League. The Premier League is also renowned as one of the most competitive leagues in the world, and this relies on the premise lower league clubs can break through. Leicester City’s 2016 Premier League win is testament to the fact the system works. 

Lower league football is in a precarious position, and the Premier League has the means and capacity to help- and so it should act. There are numerous cash and non-cash ways for the league to assist. You could argue for direct financial support, yet the Premier League could also include the EFL football within its own TV broadcast packages. They could do the same with commercial partners making the pie bigger for all. 

With the distribution of funds across the footballing pyramid currently skewed towards the top clubs, it is welcome news the league is now exploring how to restructure football’s finances and ensure financial sustainability for the future. 

Should the Government provide a bailout?

The Government indicated this month it expects the Premier League to step up and help the rest of the pyramid. However, the pandemic has created a unique situation, and one which the FA and the leagues cannot resolve on their own. 

Harry Kane has been able to flourish at Tottenham following loan spells at lower league clubs

The Government needs to look at one of the country’s most valued resources and provide support as well. Football is arguably the UK’s greatest export; internationally, 188 countries receive Premier League football broadcasts, making it the market leader in global reach and engagement.

The League’s contribution to UK GDP stood at £7.6 billion according to Ernst and Young’s 2019 report- the equivalent of 100,000 full-time jobs. More than that, research commissioned by the British Council found football is crucial to the UK’s attractiveness as a place to visit and do business with. Man City and Man Utd, for example, are vital in promoting Manchester as a place to visit, live and invest in. As well as this, football plays a major role in the social fabric of the UK, creating community cohesion, and providing educational and sporting opportunities for so many. 

The Government has provided much-needed support for the NHS and for teachers and schools, both of which are integral to British society, but I would argue football is also a huge part of UK daily life. Clubs cannot afford to wait while the Premier League debates its next steps, and so the Government needs to act. 

Without the heart of the EFL and grassroots football behind it, the PL cannot hope to maintain the dominant position it has enjoyed as a global brand.

There are numerous ways the Government can provide support that would help relieve the short-term economic fallout from the pandemic, both directly and indirectly. All options should be on the table and these discussions must be had in support of an industry that is so important to the battling spirit- and economic recovery- of the nation.

Time for change

English football stands at a moment of reckoning. As clubs await much-needed lifelines, they must look to new revenue streams, with digital connectivity as their focus. Emerging technologies provide a myriad of opportunities. For example, we created Fantastec SWAP to allow football fans to collect and curate their special moments from throughout the season whether they are allowed to attend or not. Our unique approach also helps teams engage with global fans more directly via our blockchain-based digital collectibles platform. It is time to review all options big and small.  

In the short term, it’s likely Government provided, or stimulated, support is needed to keep English football alive, and to sustain a massive industry worth upwards of £9 billion a year to the economy. Meanwhile, the Premier League must also play its part in holding out a helping hand to struggling lower tiers in the same way we have all helped our neighbours during this crisis. The top tier of English football is a sum of its parts. Without the heart of the EFL and grassroots football behind it, the PL cannot hope to maintain the dominant position it has enjoyed as a global brand.

It is time for an overhaul of the way football revenue is distributed, and for clubs to rethink the ways they can generate incremental funds. Meanwhile, the Government needs to kick-start recovery because jobs, livelihoods, and the future of English football, one of our most cherished national treasures, is on the line. 

Start-up Euphoria: the challenge of living by a ‘fast and agile’ culture in an ever-changing environment

Ninety days ago, I outlined how excited I was to be creating a technology-led start-up working primarily in the sports sector. Now, after meeting with a wide-variety of professionals within the technology industry, I can tell you I am more excited than ever.

I have travelled to numerous places during this pre-seed due diligence period to meet with start-ups, mature tech companies, venture capitalists and investment funds, plus friends within the sports industry.

I wanted to get their perspective on the future as I have always felt if you are truly interested in succeeding then you can learn something from everyone.

My travels took me to Norway, Chicago, Detroit, Indianapolis, Seattle, Detroit, Denver, Vail, Aspen, San Diego and the greater Los Angeles area. Despite each of these being very different locations, three things became evident for my future start-up:

1. Technology

It’s not just changing at the most rapid pace in history, the speed of change increases with every passing day. It is clearly apparent that every organisation going forward needs to live by a culture of ‘fast and agile’ – fast and agile with ideas, decisions and actions. This philosophy has led us to commit to meet with leading researchers, innovators and futurists on a weekly basis whether they are in Asia, Europe or North America.

2. Funding

I saw several great technology concepts that were struggling or near death because they did not have appropriate funding. Some of the VC’s joked that our new venture, despite being in the ‘pre-seed’ stage, was already better funded than many of the activities they are invested in. This underlines to me the need to continually secure funds for future years and projects.

3. People

Some ‘get it’ in the tech space and others merely talk about it. We will only succeed with people that have the right tech disruption attitude, plus a start-up mentality. That outlook is comprised of equal measures of a can-do attitude, a whole lot of personal drive and the ability to work intensely with a diverse team. Our team will be the first ever to bring together scientists, engineers, data analysts and coders as well as sports marketing and communications professionals.

The future

The last 90-days have made me even more excited about our new venture. Despite new objectives being set for required funding levels and engaging with true game-changing technologies, I am confident in the team we are assembling.

But it hasn’t been all investigative work. We also made some core early decisions on our office location and branding.

For our NewCo name we have retained an award-winning London design agency to create a relevant and memorable company name. It will lead our brand identity and be applied across all of the digital platforms our design team are building. I am extremely pleased with the progress made which will allow us to launch on schedule in January 2018.

For our office location, we selected the Surrey Technology Centre incubator. More successful start-ups have begun here than in any other location across Europe. It was tough to secure a place as it is already a hotbed of engineers, scientists, coders and researchers.

Many refer to this locations as ‘e-Hollywood’ because so many game developers are based here. I really like the AR and VR companies I have met, while a few up-and-coming AI companies have shown me some amazing future work. Finally, it’s hard not to be impressed by the revolutionary and sizable 5G innovation centre.

It has been very inspiring meeting with so many tremendously smart tech companies, but it has been also somewhat daunting as many of these operations openly shared the challenges of their own start-up journey.

The next 90-days will see us break cover with our new company name and identity, new team members and a few new technology led sports products. I am certain it will continue to be an incredible journey.

Always onward and upward.

Start-up Euphoria: the challenges connecting new technologies and sports

What’s not to like about creating a technology and sports related start-up in 2017?

First off, the technology transformation of industries is the most exciting business activity we will see in our lifetime. Think about it, as it must be a similar transformational feeling to when electricity became the norm in business.

Secondly, in my view sports popularity will continue to grow as the world becomes even more connected. So, who’s really focused on bringing these two powerful forces together? Not many, based upon my research.

Sure, some are doing it as an extended tail of an existing product like Facebook, but other than wearables not many are contemplating a sports first approach with technology.

Over the next 90 days, I will engage with some of the biggest and most interesting technology companies in the world. I will also meet with sports industry leaders, attend tech and sport seminars to uncover key insights while diving into research far and wide to define our future vision.

I’m not interested in taking something existing and making it 10% better, I am much more interested in developing genuine game changers. Simultaneously we will engage with all the start-up funding options available.

Here’s an example to help you with my thinking. The Premier League used painted A-frame pitch signage prior to today’s modern LED signs. Such an innovative piece of technology has revolutionised this aspect of sport to allow more brands to participate and at a much higher level of creativity.

Pitch signage was a cottage industry prior to a former client bringing this modern technology to sport in the UK. These LED pitch signs are now a multi-billion-dollar global business. That’s the kind of technology-led transformation I will be developing with the new team.

Having created more than ten successful start-ups, I know first and foremost the new enterprise will start with people. The new team must buy into our vision for the future while simultaneously not being frightened that it is not entirely mapped out. We will meet with technology companies big and small looking for tools and inspiration to propel us forward.

We will use our experience in sports, science, engineering and data to collaboratively explore and deliver future products. Our deep connections within worldwide sport will help us gain frontline insight into today’s problems and tomorrow’s challenges.

Our commitment to a transparent, collaborative and team-focused environment will be augmented by the latest business operating technologies and industry leading employment practices. We have already committed to adopting employee best practices from Pixar, Netflix and Google that we will mesh with our own successful experiences.

Equally, we will not be fearful of trying new concepts like team training days every week, not merely once a year. The four finalists for our office location are all technology hot beds and we will select the best location for access to talent, technology as well as quality of life.

It’s an amazing time to launch a start-up and in 90-days I will let you know how we have progressed with our ambitious plans for creating a technology-led sports enterprise.

About the contributor

Steve Madincea is an entrepreneur and innovator within the sports industry. His last two award-winning start-ups PRISM and Outside the Box were sold to WPP Group PLC. Because Madincea has created start-ups in the United States, Asia Pacific and across Europe and the Middle East he is widely accepted in boardrooms throughout the world. When not building future enterprises Madincea can usually be found training for half-marathons and using this time as valued thinking time as well.