Broadcast pressures see European football end lock-down

26 June 2020 Consultancy.uk

With Project Restart and its equivalents having seen football resume in England, Spain, Italy and Germany, a new report has shown how important broadcast revenues may have been in pushing clubs to put their players at risk. Of the Big Five European leagues, only France’s broadcast income was low enough for it to end its season prematurely amid the coronavirus lock-down.

From a medical standpoint, the jury is still out as to whether or not the return of football can be justified as the Covid-19 pandemic continues to see thousands of new cases declared across Europe every day. While recent reports have suggested that football can be played with a “minimal risk” of transmitting viruses between players, the fact is that minimal risk is still some form of risk, and that while professionals have been ordered back to the pitch, those risks are still considered too great for amateur players in the UK and across the continent to be allowed to engage in contact sports.

The difference, it seems, is that professional football is a lucrative yet financially vulnerable industry. While football seemed to be enjoying a seemingly endless boom in recent years, the abrupt suspension of the game has brutally exposed its financial instability. According to a recent report from KPMG’s Football Benchmark team, for example, if Europe’s top five leagues were to cancel the remaining games this season, it could cost them a combined €4.1 billion.

Big five European leage clubs revenue and wage costs

As it happens, four of the five did eventually return to the pitch – with England’s Premier League, Germany’s Bundesliga, Italy’s Serie A and Spain’s La Liga now aiming to complete the current season in double-quick time. The odd one out is France, which declared league leaders Paris Saint Germain as champions without playing the remaining games of the season. While there are undoubtedly a variety of issues which were involved in this decision, a new study from Deloitte has exposed football’s increasing dependence on broadcast revenues as one of the leading factors.

Before the lock-down, Deloitte anticipates that France’s top tier clubs would have enjoyed revenues of €1.902 billion, of which 47% was made up of broadcast fees. Germany is the only other Big Five European league where less than half of revenues are made up of broadcast payments – but arguably the €1.483 billion its clubs receive is a lot harder to ignore than the €901 million Ligue 1 clubs have to divvy up between themselves. At the same time, Bayern Munich’s five-point lead atop the Bundesliga was significantly less commanding than PSG’s 12-point advantage in France – making it harder to justify handing them the title prematurely.

Selected other European league clubs revenue

Premier League

In England, however, the pressure applied by broadcasters before the restart becomes much more apparent. England’s top clubs receive a total of €3.459 billion in fees from broadcasters, accounting for 59% of their overall revenues (the biggest proportion alongside Italy). As time ticked on, with no sign of a new match to televise in sight, speculation mounted that broadcasters would ask clubs for a rebate on the money they paid to show Premier League matches – money which many clubs had effectively already spent.

While Liverpool had effectively already tied up the league, with a 25-point lead over nearest rivals Manchester City at the start of lock-down, the league as a whole clearly felt there was little choice but to resume play. In this case, whether there is a large risk, or a minimal risk, critics would argue that the health of players has still been placed as secondary to the financial health of their employers. If that is the state of the Premier League’s finances, then further questions will surely follow about its sustainability, and whether elite football in England could be faced with widespread insolvency issues if a second Covid-19 waver, or a different health crisis were to hit.

Premier League and Championship clubs avarage revenues

Commenting on Deloitte’s analysis, Dan Jones, Head of the Sports Business Group at the firm, explained, “We expect the on-going Covid-19 pandemic to cause significant revenue reduction and operating losses across European football in the current season’s financial results. Clubs are having to weather multiple financial impacts, including rebates or deferrals of commercial and broadcast incomes, as well as the loss of match day income and other event-related revenue.”

Beyond football’s top table, Covid-19 has also had a major impact on smaller leagues across Europe. While some leagues like the Netherlands have low broadcast income, but have large revenues from other sources of commercial income, meaning they can afford to declare an entire season null and void, national leagues which are heavily dependent on matchday revenues will be hit hard by the Covid-19 crisis. The Scottish Premiership, for example, has a matchday revenue of €116 million, compared to €51 million in broadcasting income.

Jones concluded, “Football returning – in a safe and sensible way – is clearly important to limiting the financial impact that the pandemic has had. Leagues across Europe have been responding in different ways and at different paces… While the 2018/19 season saw growth across many of Europe’s smaller leagues, the impacts of COVID-19, particularly on those leagues with a higher reliance on matchday revenue, will present a major challenge.”


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