How much longer can Newcastle and Norwich justify furloughing staff?
And then there were two: Newcastle and Norwich are the last Premier League clubs to furlough staff… but with the Canaries announcing a new signing and Toon on the brink of a £300m takeover, how long can they continue to try and justify it?
- Liverpool, Tottenham and Bournemouth have U-turned over staff furlough plans
- Norwich and Newcastle are the two clubs who still intend to use the scheme
- Norwich have been criticised for announcing a new signing only last week
- Learn more about how to help people impacted by COVID
It is never too late to do the right thing, especially at a time like this. Bournemouth, Tottenham and Liverpool were rightly criticised for placing staff into furlough during the coronavirus pandemic and they received the appropriate applause for backtracking.
The Cherries announced their reversal on Tuesday night and on Wednesday, their manager Eddie Howe – the first Premier League boss to take a voluntary pay cut – welcomed ‘the right decision’ being made.
You have to wonder what these clubs expected, however, and what talks were made by the respective hierarchies to reach such a decision in the first place.
Liverpool owner John W Henry came in for huge criticism following a decision to furlough staff
Liverpool backtracked and eventually, Daniel Levy decided that Tottenham should follow suit
Eddie Howe said he was pleased Bournemouth were not planning to furlough staff now
Liverpool were ferociously criticised and speedily backtracked in a couple of days and Fenway Sports Group deserve to still be licking their wounds from such an unedifying saga. Tottenham stubbornly held firm for longer while Bournemouth took two weeks of criticism before making a call that aligned with the outlook of their manager.
WHAT IS THE GOVERNMENT’S FURLOUGH SCHEME?
When an employee is placed on furlough they are temporarily put on a leave of absence and not paid, although they remain on the payroll, meaning that they do not lose their job.
This could be because there is no work for these employees, or that the company is not able to afford to pay them, because of the effects of the coronavirus crisis.
In the United Kingdom, the Government is offering to pay 80 per cent of a furloughed employee’s wages, up to £2,500 per month, until they are able to resume their job full time. The Coronavirus Job Retention Scheme will last for at least three months from March 1.
Norwich and Newcastle remain as the last two clubs who still plan to place staff on furlough. Much has, and will, be made of the morality of a number of calls by Newcastle owner Mike Ashley’s but Norwich do not deserve to get by without scrutiny.
Yes, they operate on a far smaller budget than their Premier League rivals – as Sportsmail reported last April, they took a slender transfer budget of £20m with them into the Premier League with an eye on preserving their financial future. They’re bottom of the league as it stands but when clubs have shredded themselves for throwing mountains of money on Premier League survival and failed, a responsible business model does deserve respect.
What doesn’t is announcing a new signing when you are relying on government money to pay your staff. On March 31, Norwich first revealed plans to furlough and on April 10 they announced the arrival of Luxembourg international Danel Sinani on a three-year deal, notably without any mention of a fee.
‘I thought the timing was poor,’ former Norwich midfielder Gary O’Neil said on talkSPORT. ‘I don’t have a problem with Norwich furloughing their staff, Norwich is not a club that is going to be financially up there with the big clubs.
‘But while you’re furloughing staff, adding a new player to the wage bill is not a great look. It doesn’t paint the club in a fantastic light.’
Their fans have criticised the move as well, with on supporter writing on Twitter: ‘Looking forward to see how he (Sinani) goes given we’ve effectively funded it.’
Norwich, who still plan to furlough staff, signed a new player in Daniel Sinani last week
Norwich supporters have criticised the timing of the both to sign a new player at this time
Former Norwich man Gary O’Neil said the timing ‘doesn’t paint the club in a fantastic light’
Norwich sporting director Stuart Webber spoke to BT Sport on April 4, six days before Sinani’s signing was announced, defending the club’s decision.
‘The reason we have furloughed our staff is because we have been told by the government that they can’t work at the moment. Every member of staff has had their wages topped up and when the government initiative came in, for a self-funded club like us, we were extremely grateful for it,’ he said. Some people, like O’Neill, may agree with that.
Webber continued: ‘It is the biggest myth ever that football is full of money.’
Except it isn’t quite a myth, is it? Norwich and Newcastle are getting a slice of a £4.35BILLION television deal for competing in the Premier League, a deal that runs between 2019 and 2022.
Yes, top six clubs – like Liverpool and Tottenham – will be getting a bigger slice of the pie but let’s not fool ourselves. Huddersfield Town, who finished bottom of the Premier League last season, can anticipate parachute TV payments from the league in the region of £91m.
So even if Norwich finish last in the Premier League and are relegated, which inevitably brings a financial hit, is it enough to justify using government money now?
Newcastle, meanwhile, were the first Premier League club to utilise the scheme.
They are topping up wages of non-playing staff so that they ultimately don’t receive a cut in their pay while director Lee Charnley has said the measure is to ‘safeguard the future of the club’.
But their position in the Premier League is far more secure than Norwich’s – they are five places and eight points above the bottom three and it would take a remarkable slide in form for them to be relegated, if and when the season resumes.
And when that day comes, Newcastle could be under different ownership.
Mike Ashley’s Newcastle were the first Premier League side to plan to furlough staff
When the season resumes, Newcastle could have new ownership fronted by Amanda Staveley
The framework appears to be in place for a takeover that is spearheaded by Amanda Staveley and backed by the mega-rich Saudi crown prince Mohammed bin Salman and Saudi Arabia’s Public Investment Fund, which will take an 80 per cent stake in the club.
Should that deal be completed, there will be numerous discussions over the morality of a deal that is backed by a country with a hugely questionable human rights record – Amnesty International have already criticised a potential deal, saying it would be ‘sportswashing, plain and simple’.
But at the very least, if a deal goes through it will emphatically erase any reason for the club to be using the furlough scheme.
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