Ending football season early could cost Europe's top clubs billions

20 March 2020 Consultancy.uk 6 min. read
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Every industry is currently experiencing a prolonged period of uncertainty thanks to the Covid-19 pandemic; even the seemingly recession-proof world of elite level football. With all of Europe’s top leagues currently suspended for fear of transmitting the virus, a new report has suggested that the continent’s top table of clubs could be about to take a financial hit of more than €4 billion.

At time of writing, the Coronavirus outbreak of 2019-20 has seen over 200,000 people infected worldwide, leading to around 9,000 deaths. The infectious disease causes most of those affected to develop a fever, dry cough, fatigue and shortness of breath – however, cases can progress to pneumonia and multi-organ failure in the most vulnerable.

Due to the extremely contagious nature of the current pandemic, it is therefore not especially surprising that the international machinery of elite football has ground to a halt. Mass gatherings of tens of thousands of fervent fans in close proximity would have provided Covid-19 a veritable Petri dish of the most ideal conditions through which to survive and spread – while contrary to widely held beliefs, top level athletes often have weaker immune systems than the average person, as the periods of intensified training which they regularly endure have been shown to chronically depress immune function.

Impact of the Coronavirus on Europe’s top 5 football competitions

For the sake of both players and fans, postponing top level football for at least the next few weeks is a common-sense precaution then. As with any other industry at this difficult time, however, these preventative health measures come with an economic cost. Beyond the lofty revenues of England’s Premier League, for example, many lower league sides have been pushed to breaking point by the sudden absence of ticket and television revenues – prompting the English Football League to sanction a £50 million package to help clubs enduring immediate cash-flow problems from the suspension of matches because of the crisis.

If the current conditions endure, the economic repercussions are likely to have a significant impact on top football clubs too. According to a new report from KPMG’s Football Benchmark team, if Europe’s top five leagues have to cancel the remaining games this season, it could cost them a combined €4.1 billion.

According to the study, a combination of losses in matchday, commercial and broadcasting revenues could cost the Premier League alone around €1.3 billion. While the bulk of that is likely to come from broadcasting, which has long boosted the financial clout of England’s top tier, Premier League clubs also stand to lose most of any of the Big Five in terms of commercial revenue – with a retail slowdown caused by declining consumer spending power exacerbated by a big decline in customer footfall, as the world goes into lockdown.

Perhaps this is why the Premier League seems keener than any of its competitors to get proceedings underway again. Despite the risk potentially posed to players (who might be told not to shake hands before matches for the sake of hygiene, but still spend 90 minutes grappling with each other afterwards), England’s highest division is set to return in early April – with games likely to be completed behind closed doors. At a conference call earlier this week, representatives of all 20 Premier League clubs restated their determination to get the current season finished if at all possible, ideally by the 30th of June.

Looking at potential impacts, KPMG said, “The upcoming weeks may be treated as a  holiday period, but what happens if matches are delayed for longer? Will clubs pay other staff, including trainers or medical staff when there is not even training held for weeks or months? Can solidarity, and government intervention like in other sectors of the economy, ease some of the pain? Will big clubs be thinking about the smaller clubs when coming to their conclusions? These and some other questions remain unanswered at present, but will have to be addressed as soon as possible once the pandemic will show signs of retreat.”

Restricted movement

The decision of UEFA to postpone Euro 2020 for a calendar year will provide other leagues to follow suit in this regard. The competition would undoubtedly have been a logistical nightmare, as it was scheduled to take place across the entire continent for the first time in its history. With borders closed between many of the host nations now, that would likely have been impossible.

As the international calendar has suddenly cleared, Europe’s top leagues of England, France, Italy, Spain and Germany will have a window of opportunity to complete their domestic seasons – if the current crisis lessens. However, it is still unclear if and when European club football will continue. As it is subject to the same challenges as international football – including the need to travel across borders en masse – it is very unlikely the Champions League and Europa League will be able to return to business as usual this season.

KPMG’s report did not factor in what kind of a knock this will have on the revenue of top clubs. As prize money and broadcast revenues from UEFA competitions make up a sizable portion of income for a quarter of teams in each Big Five league, it is likely this change will have an unavoidable impact. This may be lessened by the decision to play a smaller ‘winners tournament’ to quickly decide each contest, but it will not be entirely mitigated.

The researchers also found that the crisis may have further impacts beyond this season, concluding, “The impact is not limited to the operating activities of football clubs, but will also affect their operations with players, which constitute the most valuable assets of any club. In this regard, how will the transfer market be affected? Some expect that the summer transfer window will be shortened, some fear that big clubs may try to take advantage of the situation and sign players on the cheap from clubs who cannot cope well with the loss of revenue caused by disruption of their business."