Europe's top football leagues lose £4.5 billion due to pandemic

15 January 2021 5 min. read
More news on

The impact of Covid-19 on the global economy means Europe’s top football leagues lost £4.5 billion in revenues over 2020. While small clubs have been left on the brink by the crisis, a new report has found that the champions of Europe’s six wealthiest leagues also face a black hole in their budget thanks to the pandemic.

While as recently as 2019 football seemed to be enjoying an endless boom, the abrupt suspension of the game in response to the coronavirus pandemic brutally exposed financial instability. According to one report from KPMG’s Football Benchmark team, for example, if Europe’s top five leagues were to cancel the remaining games of the season, they could have lost a combined £3.6 billion – including a hefty rebate to broadcasters whose lucrative deals to screen the league have stuffed the coffers of the sport for so long now.

While the majority of Europe’s elite football leagues did return to the pitch in the end, a follow-up study from KPMG has now revealled that this was not enough to avoid a huge dent in the finances of the sport. This may have had a more drastic impact on the smaller clubs of the continent – a number of whom who have been pushed to the brink of liquidation by the events of the last 12 months – however, more surprisingly it has also seen football’s top table lose huge sums of money, which may have drastic implications for their operations for years to come.

Operating revenues overview (in EUR million)

According to KPMG, six of Europes biggest leagues lost a combined £4.5 billion in operating revenues through 2020. Showing just how badly thing deteriorated over 2020, even the champions of Spain, England, France, Italy, Portugal and Germany – not to mention the entire continent – saw notable falls in income. The huge pots of prize money associated with winning the Bundesliga and the UEFA Champions League were not enough to see the Baverian giant avoid an £16.28 million (€18.3 million) decline in revenues – however, it did still record the largest profit of £5.25 million (€5.9 million).

Similarly, Liverpool spent the year as World Club Cup holders, and completed their first top-flight triumph in 30 years in 2020, but even these momentous sporting achievements were not enough to keep the Reds’ revenues from shrinking by £42.35 million (€47.6 million). While it is yet to announce its financial results, Liverpool’s restrained performance in the summer transfer market may still see it record a slim profit, however. Similarly, Real Madrid also saw an 8% fall in operating revenue en route to a La Liga title, however Los Blancos’ massive annual income remains the largest among all of Europe’s champions – something that means it continues to record a slender profit of £266.9 million (€300 million).

Meanwhile, the stagnation of Juventus – still dominant in Italy, but still desperate for a first Champions League title of this century – continued, with the club seeing its revenue tumble by 13%. This still paled in comparison to the situation at Paris Saint Germain, however, with the club seeing a 15% decline – the largest blow in absolute terms to a European champion, worth £84.88 million (€95.4 million) – even as Les Parisiens reached their first ever Champions League final.

Clubs’ profitability: on-field review

By far, however, the champion worst impacted by the coronavirus pandemic came from the Portuguese Primeira Liga. 29-time winners Porto saw operating revenues slashed down by more than half over 2020, losing £79.18 million (€89 million). This is mainly a consequence of their early exit in the Champions League qualifying rounds, however, and with the 2003 winners having significantly improved on their performance this year by progressing to the tournament’s knock-out phase, the Dragões will hope to give their finances a much-needed boost by the end of 2021.

Such a reversal in fortunes will be precisely what Porto needs in the coming months, with KPMG finding that it’s fall in profitability was only surpassed by Paris Saint Germain. While the French champions can ultimately fall back on the wealth of owner Qatar Sports Investments in order to not only survive but continue to sink millions into efforts for continental domination, Porto has no such luxury. If 2021 does not hold a significant improvement for the club – and many more who do not have Champions League football to lean on – there will likely need to be serious restructuring efforts, with inflated player wages becoming an unaffordable cost for clubs short on cash.

Andrea Sartori, KPMG’s Global Head of Sports and author of the report, commented, “The coronavirus crisis has questioned the financial sustainability of the football ecosystem as a whole and further exposed its fragility. Even prior to the pandemic, inflated players’ salary, coupled with growing transfer and agent fees, placed a significant strain on clubs' finances. The crisis has magnified these flaws in the current business model. Football clubs suddenly had to deal with liquidity concerns with all of their income streams affected by the absence of gate receipts, in addition to the renegotiation, suspension or cancellation of payments from media and commercial agreements.”