The COVID-19 pandemic has had an impact on almost all aspects of human life. With the United Kingdom government locking down the country due to the threat of the virus, regular economic activity was at complete standstill. To support businesses and employees during this time of lockdown, the UK government introduced the Job Retention Scheme.
Under the scheme, UK employers can designate some employees that are under the PAYE scheme to be "furloughed workers." Under these circumstances, the government will pay 80% of the employee's fee, while the employer only has to cover 20%. While all businesses are free to pursue the program, the news that Liverpool was going to furlough
Liverpool players’ salary was met with immense criticism.
Liverpool FC’s Furlough Plan
It’s shocking to think that a football club of their stature would need to furlough its working staff and have the government bear the brunt of paying 80% of its salaries.
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Reactions To Liverpool FC’s Move
The footballing world didn’t take Liverpool’s decision lightly, especially since the club had secured record revenues in recent years. Fan groups and pundits alike gave them immense criticism, citing their position as one of the biggest employers in not only the city but in the UK.
There's no doubting the fact that legally Liverpool FC, as a business, qualified to put their working staff on furlough. However, it became a moral issue. Fans expect football clubs to function differently than a regular business because there's so much emotional investment in the business.
This explains why former players felt so strongly about the decision of their beloved club, and why fans responded so strongly as well. Jamie Carragher addressed the fact that the manager Klopp had shown a lot of compassion for everyone at the start of the pandemic, and all the players have been working had to do their bit for the communities, the decision to furlough staff has done away with all the goodwill.
To the credit of Liverpool Football Club, they listened to the voices of fans and former players that were calling out for them to reverse their decision. Chief executive Peter Moore said in a letter to the fans that they came to the wrong conclusion and were genuinely sorry for that.
The decision to make the U-turn came after the criticism led to talks between the club’s owners, executives, and key shareholders. As a
result of the meeting, the decision was made to change the furlough decision. Peter Moore claimed that the reason to furlough in the first place was to ensure that the entire workforce got as much protection as possible. He went on to acknowledge the Liverpool staff and casual workers at the club who help ensure that the football club can operate according to the highest standards.
Liverpool FC’s Financial Standing
While remaining transparent, Peter Moore also claimed that despite their strong financial position prior to the crisis, the club’s revenues have been completely shut off. At the same time, their expenses were still ongoing. Like all other businesses, the club is going through a considerable period of uncertainty about the future. Moore also claims that the club is going to continue to show concern for its workers and will continue to prepare for a range of different scenarios, including the return of the operation before the pandemic. Some of the unavoidable truth is that all of these scenarios involve a downturn in revenue, with massive losses in operating income.
Hopefully, the addition of television revenue will ease the financial burden on Liverpool FC. The fans and ex-players are commending the club’s decision to reverse furloughing the staff.
Conclusion
The pandemic has brought about uncertainty for everyone. However, the way major businesses are reacting to the
economic downturn can determine whether they get to keep or could potentially lose their existing customer base. Liverpool FC's furlough decision created a divide between fans and club but that has been amended.
