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English Premier League builder: Big money problems ahead for teams because of coronavirus

“I think the situation is dire,” former Tottenham chairman Alan Sugar says of the world’s richest soccer league.

Three decades after helping to establish what has become the world’s richest soccer league, Alan Sugar assesses its financial landscape with growing concern.

“There’s a lot of problems ahead for the Premier League,” the former Tottenham chairman told the Associated Press. “There’s no question of that. I think the situation is dire.”

The coronavirus pandemic shut down the English league a month ago, and there is no indication when games can resume. Losses of more than $1.2 billion are feared by the league.

“Some clubs just simply can’t afford it,” Sugar said. “They work from hand-to-mouth. I know it sounds ridiculous, but they spend every single penny they can on player transfers and player wages, and they rely upon the income coming in to pay their bills … and if you stop the income coming in, then where are they going to get the money from?”

The game-day revenue from tickets, food and merchandise has already been wiped out. And with about a quarter of the season still to be played if the season resumes, the league’s concern will be broadcasters suspending payments or seeking refunds on deals worth about $3.7 billion annually.

“I fear for some clubs,” Sugar said from Miami.

In 1992, Sugar played a key role in the formation of the Premier League that was bankrolled by Sky, then a fledgling satellite broadcaster. Sky’s set-top boxes were made by Sugar’s technology firm, Amstrad, and became more in demand as pay-TV soccer drove up subscribers.

But investing in a team proved costly. When Sugar’s decade as Tottenham chairman ended in 2001, he said about $124.5 million had been spent on player transfers.

“Football,” Sugar now observes, “has just gone completely nuts as far as money is concerned.”

Tottenham spent more than $62 million alone last year on midfielder Tanguy Ndombele to break its transfer record. With soccer finances shredded by the spread of the coronavirus, Sugar cannot fathom why players won’t accept being paid less.

“The players are the biggest payroll,” Sugar said. “Unfortunately, in order to stay in the Premier League … most clubs pay over the top for players and transfer fees, and pay over the top for wages.”

The players union rejected a collective push by Premier League clubs to cut salaries by 30 percent during the pandemic over concerns the move might only have enriched their owners and reduced tax bills that provide funding for the National Health Service. But Southampton’s squad did agree to at least defer three months’ pay.

“If (the teams) haven’t got the money, you can’t pay them,” Sugar said. “What is (Professional Footballers’ Association chief executive) Gordon Taylor going to do then? He can’t sue the club if they haven’t got any money, particularly if they’ve gone bust. What’s he going to do? Is he going to dip into the multimillion coffers of the (union) and pay everybody out?

“Because at the end of the day, I can tell you if this goes on for months into the next season, certain clubs … will have to go into receivership then … and then the players won’t get paid.”

Some players have launched a fundraising plan for National Health Service charities, but Sugar believes that is not sufficient.

“You need to ask the players to help to support their clubs like they have done at Real Madrid,” Sugar said, lauding the Spanish club’s players for taking pay cuts of up to 20 percent. “They’re not just supporting the football club. They’re supporting their colleagues. They’re supporting their non-playing staff.”

The debate over players’ pay was ignited by Tottenham placing some furloughed non-playing staff members on a government scheme designed to protect jobs at struggling companies.

“It is the law at the moment,” Sugar said. “You send people home and you’re entitled to do it to get paid.”

But Tottenham has been owned since the end of Sugar’s tenure in 2001a by Joe Lewis, whose wealth is valued at more than $5 billion by England’s Sunday Times. The club is reportedly the eighth biggest money-maker in the global game.

“Tottenham have got a lot of criticism there about (chairman) Daniel Levy putting people on furlough,” Sugar said. “I don’t understand the logic. Why? Because he’s a company. They are a company. They’ve got 500 non-playing staff. … It’s no different to anyone else. No different to say … one of these massive great big clothing retailers that have had to shut down. Liverpool kind of caved in under pressure.”

Premier League leader Liverpool, which beat Tottenham in last year’s Champions League final, said it was “truly sorry” for trying to use public money. But Tottenham has to service loans of almost $800 million that were taken out to fund its $1.3 billion stadium that opened last year.

And with the pandemic impairing the spending ability of rivals across Europe, players could be short of options in power plays.

“The threat over the heads of all the clubs at the moment is, ‘If you don’t pay me, I’ll go off. I’ll go and play for someone else,’ ” Sugar said. “Certainly not in the Premier League and certainly not in Europe ... because they shut down. So there’s nowhere to go.”

But will the financial ripples caused by the pandemic really change the world’s biggest sport?

“Maybe this is like a devil in disguise ... and it’s kind of a leveler,” said Sugar, who hosts the British version of the reality TV show The Apprentice on the BBC.

“The power of the agents, the power of the players will not be as strong as it was because they will still be a bit shellshocked,” he said. “If we get back to some form of normality in a year or so time, then I think we’ll be back to the same old.”

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