Newcastle United’s Decision To Use The UK Government’s Employer Payment Scheme Is Looking Untenable

Scrutiny and criticism are nothing new to Newcastle United; some would say they actively seek to provoke it through decisions they have made in the past. But the coronavirus pandemic has put them on the back foot like never before; while failing to sign a player, keep hold of a manager or demonstrate the level of ambition regularly demanded by a passionate fanbase on Tyneside can be seen as callous acts, they are not likely to impact the lives of ordinary people directly. Utilising the United Kingdom government’s ‘furlough’ job retention scheme, which pays 80% of an employees wages, though, brings the clinical and cold approach often taken into much sharper focus.

The scheme was announced by Chancellor of the Exchequer Rishi Sunak last month and is designed to help small businesses stay afloat during the ongoing economic trouble the virus has caused. Quite understandably, the fact that a list of Premier League soccer clubs, that started with Newcastle but has gone on to include Bournemouth, Norwich City, Liverpool and Tottenham Hotspur, have chosen to place non-playing staff on furlough has been met with a backlash of moral questions. As a result, the latter pair have decided to do a u-turn and will continue to pay everyone in full. While praise for this action is perhaps overkill, given that it suggests those making the decisions were doing so out of opportunism rather than necessity, they have at least understood the situation and reacted. Naturally, the pressure on others to follow suit will be ramped up.

It was Liverpool who endured the hardest response to their announcement, perhaps because of the perception of themselves they have long attempted to convey. The community spirit represented in their famous anthem “You’ll Never Walk Alone” had began to lose its true meaning for some, and the damage done could be irreparable. By contrast, Newcastle have escaped the spotlight, much to the frustration of supporters who already believe their owner Mike Ashley gets an easy ride from the national media.

But Ashley has already come under fire for one response to the COVID-19 crisis; a day after the UK-wide lockdown was announced and all non-essential businesses were told to close, his retail chain Sports Direct attempted to go ahead as normal. Nationwide condemnation and the intervention of the authorities stopped them in their tracks, and Ashley was forced into an apology. Perhaps that will be an insight into whether he and Newcastle will bow to public opinion again, but it is also worth mentioning that they have pushed ahead with charging people for season tickets, despite a huge furore and calls, including from this columnist, not to do so. Ashley has built a business on gambling and taking a chance; he is known for calculating without emotion, so there won’t be many people backing Newcastle to join Liverpool and Tottenham in going back on themselves.

Those affected by the current stance are getting full pay until the end of April at least; the 20% the scheme doesn’t pay is being covered by the club. Newcastle have very little going on right now, though some employees who have been deemed as potentially essential are reportedly able to be called in on 24 hours notice. Among them is Head of Recruitment Steve Nickson; right now, with even the transfer window under a cloud ahead of the summer, deals aren’t a priority.

Part of the scrutiny the likes of Newcastle and others have faced in the last few days and weeks is the question of whether they should be allowed to do business at all, considering their recent actions. From a PR perspective, it looks bad enough that chefs, cleaners, ticket staff and foundation workers aren’t being paid in full by their employer while players and first team coaches are, but paying out millions on fees and wages for new signings off the back of it would further increase the shakiness of their moral ground. For context, there has been a player-wide agreement across the league that 30% of wages will be donated to the National Health Service in their time of need, but the fact that everyday members of staff were hit before those with deeper pockets increased the sense that some clubs’ response has been completely tone deaf.

It has always been assumed that teams in the top division would survive this crisis financially because the biggest hit taken would be matchday revenue. The suggestion some weeks ago was that equates to around 14% of a Premier League club’s overall income, and that they should shoulder some of the burden of lower league clubs, who rely much more heavily on ticket sales. Lee Charnley, Newcastle’s Managing Director, said in an email that furloughing was in aid of “safeguarding the club’s future”; that has been a difficult pill to swallow both for those affected and those watching on.

Whether Newcastle do change their minds remains to be seen. It took an almighty force to make Ashley react before, and that may not be enough here. It certainly doesn’t sit right with anyone; the current regime has tried their luck multiple times before, but never like this. Scrutiny has often been met with a “no comment” response; if they continue in similar fashion here, their position will become more and more untenable. Their reputation is set in stone for many, but they must begin to see sense now that particular path has been laid or risk the biggest backlash yet.

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