Wigan Athletic could be followed into administration by “10 or 15” clubs unless some financial help comes from the top of the game, warns the Digital, Culture, Media and Sport Committee.
Administrators acting for the Latics have said the club is ‘finished’ if funding cannot be found to get it through to the end of the season after its Hong Kong-based owners pulled out.
But the fear of many within the game is that Wigan will only represent the tip of a large iceberg as the full impact of Covid-19 starts to take effect.
“It would be tragic if a club that has been in existence for nearly 90 years is forced to the wall,” said Julian Knight, chair of the Department for Culture, Media and Sport Committee.
“We know that 10 to 15 clubs could find themselves in the same position. (On Monday) the DCMS Committee sought clarification from (Premier League chief executive) Richard Masters on what action it was taking to provide extra money for clubs at risk – he told us that the Football League hadn’t asked for extra funding and the Premier League hadn’t provided it.
“That’s a situation that has to change.”
BBC Sport understands there has, in fact, been talks between Premier League executives and their EFL counterparts. The EFL has made its position clear, although the Premier League is thought to be concentrating on trying to complete the current campaign before looking at the wider state of football finances.
Privately, the EFL is braced for the coronavirus pandemic to cost its clubs a combined £250m.
The Premier League already provides around £400m each year in funding to the EFL but around £260m of that goes to nine clubs in the form of parachute payments to those relegated from the top flight in previous seasons.
In May, EFL chairman Rick Parry called those payments “an evil that must be eradicated”.
Many Championship executives feel the gulf in finances between the top two divisions is unhealthy and has created a situation where clubs spent far more than they can afford in the hope of reaching the Premier League.
Speaking to the BBC in May, Huddersfield owner Phil Hodgkinson warned “50 or 60” clubs could go bust and some were only trading because they were deferring wages, tax and other creditors.
Hodgkinson, whose club are among those currently receiving parachute payments, said there should be an across-the-board wage cut, with the money being combined with part of the £340m rebate Premier League clubs have had to give back to broadcasters to help those who need it survive the coronavirus pandemic.
Then, he felt, stringent wage regulations should be applied to prevent clubs getting into trouble.
The EFL wants to introduce salary caps for Leagues One and Two next season. However, the Professional Footballers’ Association is opposed to this and say current Financial Fair Play rules should be monitored in a more effective way.
As those arguments continue, clubs are starting to face the financial reality of the situation they now find themselves in.
While the Premier League and Championship have decided to finish their current seasons ‘behind closed doors’, there has been no clarity over what happens to the 2020-21 campaign.
The expectation is the Premier League will resume in September and the Championship on either 12 September or 29 August.
What is not known is whether the appetite among clubs in League One, League Two and the National League will be to start their seasons in front of either no spectators or limited capacity, given match-going fans provide the bulk of their income.
In addition, the developments around Wigan will again bring debate around the EFL’s owners and directors test. The Hong Kong-based consortium who bought the club from Dave Whelan in 2018 passed it.
However, as was the case at Bury and, now Charlton, clubs have been bought without EFL approval.
Charlton have had two takeovers this season and so far, the EFL is still to say whether it is happy with either. On Tuesday, the Charlton Athletic Supporters Trust published a list of nine questions it wanted answering by new owner Paul Elliott, a Manchester-based businessman.
Few would doubt 83-year-old Whelan’s good intentions for the Latics. He bankrolled Wigan on their fairytale rise from the fourth tier of English football to the Premier League and has already been talking about what he can do to help.
It is understood there are 600 full and part-time employees at the club, with administrators now set to face some uncomfortable decisions.
“What’s needed now is leadership from the very top of the pyramid to help save the Wigan side and the jobs of those who work for it,” said Knight.