Furloughing: A ‘crass grab’ to leverage players or a reasonable reaction to protect jobs?
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Updated 06/04/2020 at 20:57 GMT
Marcus Foley dissects furloughing in football after Liverpool stated its intention – and then withdrew it – to put staff on the government’s Coronavirus Job Retention Scheme.
The official Nike Premier League match ball with a protective mask. The Coronavirus (COVID-19) pandemic has spread to many countries across the world, claiming over 40,000 lives and infecting hundreds of thousands more. on April 3, 2020 in Manchester, Eng
Image credit: Getty Images
WHAT HAPPENED?
Liverpool released a statement over the weekend stating that they had taken the decision to furlough some non-playing staff.
The decision had been called “crass grab for public cash” by Henry Winter of the Times, while Simon Hughes of The Athletic added that the decision could "lead to an identity crisis all of the club’s own making" and the Spirit of Shankly supporters' group called it "wrong" to use taxpayers money.
Following the backlash, the club decided to withdraw its intention to participate in the government-backed scheme.
However, the debate regarding the use of the scheme continues unabated with former Crystal Palace chairman Simon Jordan having told talkSPORT that the decision to furlough some staff might be an attempt to leverage players into wage reductions.
FURLOUGH: WHAT DOES IT MEAN?
At a basic level it means an extended period of leave. In the current context, it refers to the government’s Coronavirus Job Retention Scheme.
"If you and your employer both agree, your employer might be able to keep you on the payroll if they’re unable to operate or have no work for you to do because of coronavirus (COVID-19). This is known as being ‘on furlough’," reads a government statement.
Your employer could pay 80% of your wages through the Coronavirus Job Retention Scheme, up to a monthly cap of £2,500. You’ll still be paid by your employer and pay taxes from your income. You cannot undertake work for your employer while on furlough.
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Tottenham’s decision to cut staff pay ‘completely unacceptable’
LIVERPOOL’S STATEMENT
Liverpool had originally said in a statement that their intention had been to work "towards a solution that secures jobs for employees of the club during this unprecedented crisis" via the scheme but would on Monday issue a statement from chief executive officer Peter Moore to supporters acknowledging their misstep.
"We believe we came to the wrong conclusion last week to announce that we intended to apply to the Coronavirus Retention Scheme and furlough staff due to the suspension of the Premier League football calendar, and are truly sorry for that," Moore said in an open letter.
"Our intentions were, and still are, to ensure the entire workforce is given as much protection as possible from redundancy and/or loss of earnings during this unprecedented period.
"We are therefore committed to finding alternative ways to operate while there are no football matches being played that ensures we are not applying for the government relief scheme.
'TRULY SORRY'
Liverpool deserve credit for listening to the criticism - see above - and acting upon it. The letter from Moore acknowledged the error and also thanked those who had engaged on the issue "in a productive fashion, none more so than our supporters, their representatives, particularly Spirit of Shankly, the Mayor of Liverpool, Joe Anderson, Metro Mayor, Steve Rotheram, local MPs Dan Carden and many other individuals, with whom we have had much valued dialogue."
However, the whole saga has brought to the fore important questions regarding the furloughing of staff, with one former Premier League chairman claiming that furloughing was brinkmanship on the clubs' part.
'FURLOUGHING IS ALL ABOUT LEVERAGE'
That is according to former Crystal Palace chairman Simon Jordan, who told talkSPORT that clubs are furloughing to try to force the hands of their players into wage cuts or pay deferrals.
“The idea that the Premier League is awash with money is a bit of a misrepresentation; the Premier League is awash with money but 75 per cent of that goes to the players in wages.
“Premier League clubs really don’t want to furlough.
“What they want to do is to create leverage for the elephant in the room...a few weeks ago it became apparent that clubs in League One and League Two might not survive this. And you now have Championship clubs worried and some Premier League clubs, like Burnley, saying that ‘if we don’t get any money in by August we are not going to have any money left’.
So, my belief is that if you’re Tottenham Hotspur and you have a wage bill of £160 million a year – that’s £14 million a month – if you get your players to take a 30 per cent pay cut that is a £4.2 million saving that can be used to help you offset the lost revenue or can be redistributed amongst the football family.
“If you furlough 200 of your staff at £2,000 a month, you save £400,000. The bigger gain is about getting the players to take a pay cut and it is about creating leverage, it is about creating traction, it is about putting the players under pressure to do what inevitably they have to do, which is, in this crisis, with broadcasters being challenged, with no gate receipts, with no revenue coming into football clubs."
HOW WAS LIVERPOOL'S ORIGINAL DECISION RECEIVED?
Badly. Very badly.
'WRONG'
Spirit of Shankly, a very influential but unofficial Liverpool supporters' group, called the use of taxpayers' money wrong adding “that no million-pound plus profit-making organisation should be relying on taxpayer subsidies in times of crises".
‘AN IDENTITY CRISIS’
Elsewhere, the club had been the recipient of fierce media criticism.
Simon Hughes of The Athletic details the harsh realities of the process of "professionalising Liverpool’s business operation" that has led to an era of sustained on-field success.
“It has been argued that very little focus has been on the practices of say, pharmaceutical conglomerates whose huge profits outstrip any Premier League business, but such companies have made no pretence to their intention. Over the last decade, Liverpool has successfully traded on a hybrid model that sings about its social enterprise when relevant, enabling the club to build its commercial base. All of the workers on furlough leave may find jobs waiting for them at the end of this and it might prove to be the case that nobody with a connection to Liverpool will have been left behind,” writes Hughes on the Athletic (£).
Yet if this has been achieved by needlessly bathing in a public wallet, hypocrisy exists, and this could lead to an identity crisis all of the club’s own making.
‘A CRASS GRAB’
Henry Winter in the Times did not hold back, highlighting what he saw as the hypocrisy at play in Liverpool’s words and deeds.
“The final words on the 100th and closing page of the match programme for Liverpool’s last game before lockdown, Atletico Madrid’s visit in the Champions League on March 11, read simply: 'We are Liverpool. This means more.' If you proclaim values superior to other clubs, and boast self-entitled credos such as this, you have to live by them. If you then claim state help after posting £42 million profits and spending £43.8 million on agents’ fees in a year, you deserve to be excoriated,” began Winter (£).
The Times’ chief football writer goes on to lament a “crass” grab that has undermined earlier good work:
This is the club of Sir Kenny Dalglish, that very human emblem of thinking first of others during a crisis. Henry and Werner give the impression of just thinking of the bottom line. This is not to pit Liverpool individuals against each other, simply to remind Henry and Werner of the special people who congregate in and around Anfield, and not to embarrass them with crass grabs for public cash. Furloughing? This means money for Henry and Werner. They need to think again.
Winter does recognise the good work the club has done, is doing and will continue to do, though, praising the community work players and staff from the club have done in the wake of the coronavirus pandemic.
THE PLAYERS' PERSPECTIVE
Wayne Rooney has had his say on the call for players – at times from the government – to take a pay cut or wage deferral, with England’s all-time leading scorer calling the tactics in play as disgrace, in his weekend column in the Times.
How the past few days have played out is a disgrace.
"I get that players are well paid and could give up money. But this should be getting done on a case-by-case basis.
"Clubs should be sitting down with each player and explaining what savings it needs to survive. Players would accept that.
"One player might say, 'I can afford a 30%'; another might say, 'I can only afford 5%'.
Rooney added that he did not envisage any issues within clubs if some players had to contribute more.
Personally, I'd have no problem with some of us paying more. I don't think that would cause any dressing room problems.
"Whatever way you look at it, we're easy targets. What gets lost is that half our wages get taken by the taxman. Money that goes to the government, money that is helping the NHS."
TL;DR
Some clubs have furloughed their staff and the most high profile, Liverpool, came in for acerbic criticism before withdrawing its intention to participate in the scheme. However, that u-turn acerbates the wider questions that remain, with a former Premier League chairman claiming that furloughing non-playing staff represents an attempt to leverage players into wage cuts or deferrals – while Wayne Rooney called players “easy targets.”
However, the focus on the Premier League and its players does seem skewed. The social contract that insists that those perceived to have excessive disposable income and wealth - in this instance clubs or players - should bear added responsibility in these unprecedented times is not an unfair expectation but is applicable to us all and across industry. Liverpool appear to have heeded that expectation. Yet the emphasis appears to be almost solely on football. What of multi-national corporations, whose wealth vastly exceeds those of an individual whose career is well remunerated but relatively short?
Whether furloughing is, as described by Winter, a crass grab for cash or a reasonable measure in extenuating circumstances is open to debate. The news had not been received as Liverpool have presented it, though, which was telling in itself and perhaps this best represents the disconnect between fan and club in modern football. Liverpool, the club who had just been to two Champions League finals and recently posted a pre-tax profit of £42 million, appeared well-insulated against the short-term financial hit but then football clubs are no longer clubs but limited companies, entities to make profit. The fact Liverpool u-turned does, however, speak volumes for the importance of fans having an audible voice.
This virus has shown itself to not discriminate and all the clubs - Tottenham, Newcastle, Norwich and Bournemouth - that remain committed to the scheme will likely argue that employing it for non-playing staff is fair use; that it will protect the most vulnerable within their organisation from financial hardship. The counter, and to this observer's eye, reasonable repost to that is clubs are - or at the very least appear to be - in a position to offer those protections without resorting to a government scheme aimed at companies in immediate danger from a growing pandemic. Clubs remain community institutions even if they have limited attached to their name at Companies House. Institutions come with responsibilities that supersede shareholder necessity for financial prudence - this is an all-engulfing crisis.
If it plays out that multi-million-pound institutions are employing the scheme out of want rather than need then the PR fallout could be long lasting and could - and absolutely should - cost them infinitely more than they are now currently saving.
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