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The Federal Council promises the football and ice hockey league a loan of up to CHF 350 million. The conditions are controversial. If a club cannot repay the loan, the league is jointly and severally liable.
What football professionals, Grasshoppers’ picture now, know: the more federal loans their employers need, the less they will have to earn in Switzerland as a whole.
“Now don’t ask me what that means. We have to think about everything first. The quote comes from Marc Lüthi, the CEO of the ice skating club in Bern. He is one of the best network sports officials in Swiss team sports. For he generally knows how to make a decision before his colleagues even read in the business. If someone like him is lost, it means something.
But the circumstances are also exceptional. The corona virus is bringing team sports to the brink of mass bankruptcy. Soccer and ice hockey leagues have been asking for help from the federal government for weeks. They know since Wednesday that they will also receive them: the Minister of Sports, Viola Amherd, has announced a aid package of CHF 350 million, which will lead to professional sports in two sections: CHF 200 million for soccer, CHF 150 million for Ice Hockey. However, subject to the fact that the federal councils approve the deal at the summer session in June.
This can be assumed, even if one or the other critical vote will fall. SVP National Councilor Roland Büchel is surprised that the Federal Council approved another financial decision by Corona a few days after the special session without going through Parliament. The former sports marketer is not fundamentally against financial support for sports, but says that with this “Schlungg” the Federal Council has exposed sports financing to risks, at least the procedure will be a matter of discussion.
Aline Trede, leader of the Adjunct Group of the Greens and member of the preparatory commission “Economy, Education, Culture”, says: “I am surprised by the amount of the sums. The two professional leagues have been pressing hard from the beginning.” SP National Councilor Matthias Aebischer stands behind the measures and calls them “a good overall package” because there is “victim symmetry” and A-fund-perdu contributions would not simply be distributed.
Sport reserves
It is not surprising that the abundant help in professional team sport raises political questions. It is quite unexpected that Wednesday’s press conference also raises reservations and plenty of questions within the sport. The main players in football and ice hockey are grateful for the financial aid, but they find themselves with the sometimes rigid conditions to which they are attached.
Federal Councilman Amherd said at the press conference that the aid was linked to a memorandum of understanding. This stipulates, among other things, that the total wage bill for borrowers must decrease by 20 percent in the next three years. The loans have a maximum duration of five years. They will have no interest in 2021 and 2022. An interest of at least one percent or the applicable Libor rate is then due. If a club cannot repay the loan, the league is jointly and severally liable. Borrowers must use 30 percent of their future television earnings and 25 percent of the transfer surplus to repay the loans.
However, many questions remain unanswered. Baspo director Matthias Remund was silent for a long time when asked at the press conference what was the situation with football clubs that already had a relatively low salary structure, such as FC Thun, who were to overcome a 20 percent pay cut. After a few seconds of silence, Remund said, “Yes, then we have to speak to FC Thun.”
This shows as an example that not all ambiguities have been cleared up. It is easier for FC Basel to reduce the salary structure, even quickly, because the contract of the most awarded player, Zdravko Kuzmanovic, expires at the end of the season. But what would happen to Thun or Xamax, the end of the league, if they asked for loans? How much can these clubs continue to reduce wages without losing any of their sports substance?
Everything seems to have gone pretty fast when creating this package. Even experts aren’t sure what these 20% mean. Do all clubs claiming loans have to cut their wages by 20 percent? Or does the total salary bill of all borrowers have to decrease by 20 percent?
The stabilization package doesn’t even provide clarity regarding the continuation of the championship. An extraordinary general meeting of the Swiss Football League (SFL) will take place on May 29 in which it will be decided whether the championship will resume in June (provided that the Federal Council maintains this option until then). The Young Boys, in particular, clearly defend that the season should not simply be interrupted.
FC Lugano has been on the opposite side for a long time. Angelo Renzetti, president of FC Lugano, said on Wednesday: “It can work with this federal loan. It allows us to look to the future, albeit under different parameters, and by reducing wages. In this way we can reduce the damage caused by the ghost games and approach the next season with better financial conditions, even if it starts without an audience. “
Therefore, it is not everywhere to breathe after stressful times. In the end, some people worked almost day and night on solutions for the future. Claudius Schäfer, the CEO of the SFL, expresses his relief at this “statement of intent” from the Federal Council. But is the season really over? It’s not clear. Under what conditions is the package actually tied? It’s not clear.
Joint and several liability in particular has surprised representatives of financially stronger clubs. A representative from the National Ice Hockey League asked if his club would have to pay for the SCL Tigers or Ambri-Piotta if one of these clubs claimed a loan and then couldn’t pay the debt.
The question from the point of view of a single club is justified, but it is important for the biggest problem in Swiss professional team sport: there is no solidarity. Everyone is guided by their own options and forgets that they are part of an entertainment business that only works as long as they have competitors with whom they can compete. Especially in soccer, the gap within the Super League is huge. FC Thun operates on a sixth of the Young Boys or FC Basel budget.
A salary cap as a solution
In ice hockey, where the differences in budgets are not so great, the introduction of a salary cap, a total salary cap, is discussed. If a club exceeds this, it would have to pay a kind of luxury tax on the additional amount, which would benefit its competitors. Such market regulation measures are common in American professional sports. In Switzerland, they were previously considered unsustainable under labor law. In the coming weeks, lawyers will have to examine how valid this argument is.
One thing is clear: If federal aid and its requirements are approved by the National Council and the Council of States and go into effect, then the requirements give leagues a tool to control the problem of constantly increasing player salaries. . The Federal Council requires leagues to establish a fund that can be used to save at least six months in the event of a future crisis. Youth work must continue at least in the previous framework. Also, the money should not be used to finance “above-average player salaries.” But what is above average? It’s not clear.
There are still a lot of open questions, difficult discussions are emerging, between sport and politics, but also within the leagues. Denis Vaucher, Director of the National Ice Hockey League, says: “The entire package had to be negotiated on short notice. We are aware that conditions are difficult. Some questions remain unanswered. We will have to negotiate this with politicians as part of the implementation. “
Assist: cov., Fcl.
