Germany leads way on voluntary salary cuts as football clubs struggle amid coronavirus pandemic

Dusseldorf: European football's biggest leagues continue to be suspended and players are coming under pressure to take pay cuts.

Sometimes it's voluntary, like at German title challenger Borussia Monchengladbach, where players approached the club with an offer to take reduced salaries.

 Germany leads way on voluntary salary cuts as football clubs struggle amid coronavirus pandemic

Germany's top football leagues have been suspended till 2nd April due to coronavirus pandemic. AP

Sometimes players aren't given a choice. In Scotland, Hearts has asked all of its players and other fulltime employees to accept a 50% pay cut, or contract termination.

The cuts come as clubs across Europe grapple with a sudden shortage of funds. Wage bills for the season were budgeted on the expectation of income from TV broadcast fees, sponsorships and ticket sales, which are all being scaled back or disappearing.

Germany is leading the way on voluntary cuts.

Gladbach is a surprise title contender and on track for a lucrative Champions League spot next season. If the season isn't played to the end, it's not clear how European places will be doled out.

Gladbach sporting director Max Eberl says the players approached the club with an offer of voluntary pay cuts, and the coaching staff, directors and executives have joined in.

“I am very proud of the boys. A clear signal: We are standing together for Borussia in good and bad times,” Eberl said on Thursday. He didn't specify how much of a salary cut they'd agreed to.

Gladbach CEO Stephan Schippers said the club and Bundesliga are in their toughest financial situation in more than 20 years because of lost revenue from ticket sales, TV and sponsorship.

Gladbach played a game last week in an empty stadium. The club estimated it lost about 2 million euros ($2.16 million) in revenue by playing without fans.

The German league has said clubs could collapse if the season doesn't resume. It's arguing for games in empty stadiums so broadcast and sponsor deals resume to mitigate the financial impact.

At second-tier Karlsruhe, players have agreed on reduced salaries for March, April and May.

“For us as a team there's no question that we are moving even closer together in the club and want to do our part,” captain David Pisot said. Thomas Hitzlsperger, CEO of Stuttgart, told local newspapers that salary cuts would be on the agenda there, too.

Other clubs are enforcing pay cuts.

Scottish club Hearts said all fulltime employees will be asked to take a 50% pay cut from April. The only exception will be smaller cuts for those with annual salaries below 18,135 pounds ($21,100).

“I want to assure everyone that these decisions have not been taken lightly. If I was not absolutely convinced that this is necessary for the future sustainability of our business, I would not be asking our employees to face these cuts,” chairman and CEO Ann Budge said this week.

In Switzerland, clubs have asked players to sign up for wage reductions as part of a federal government-backed unemployment insurance program. On Friday, Sion announced it fired nine players — including former Arsenal teammates Johan Djourou and Alex Song — for refusing to agree.

According to sports daily L'Equipe, some French top-tier clubs have started putting players on temporary, technical layoffs. That means a small cut in pay and the state picks up a portion of the bill. It mostly impacts those on the highest salaries.

Players in Italy are resisting possible cuts.

“We’re aware that the contracts issue needs to be addressed, but not now,” Italian football players’ association president Damiano Tommasi said.

“First, the damages need to be calculated and that will only be possible once we know if the season will finish or not. The problem of cutting salaries should be addressed in due time."

One solution could be to start counting days under suspension as part of the summer vacation, he said.

European football's governing body, UEFA, is trying to help. It's postponed the European Championship to 2021 to allow national leagues to finish their seasons and keep clubs afloat.

UEFA has extended a 31 March deadline by one month for clubs to show they have no outstanding debts for taxes and transfer fees.

The Financial Fair Play system monitors at least three years of accounts for hundreds of clubs that qualify to play in the Champions League and Europa League. Clubs that fail to break even on commercial income and spending on transfers and wages risk sanctions that include being expelled from competitions in the most severe cases.

UEFA said the established rules allow for unforeseen circumstances, which “is taken into account as part of the clubs’ assessment on a case by case basis.”

Updated Date: Mar 21, 2020 11:20:57 IST



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