Study: Pandemic to cost top European leagues €5bn in lost revenue
The study issued this week by KPMG shows that the champions of six prominent leagues posted combined lost revenue of €372 million in the 2019-20 season, as the final stages were delayed or cancelled and spectators were excluded.
With fans still largely, if not entirely, absent and other revenue streams impacted, the professional services company is projecting that total lost revenue for the top divisions for the 2019-20 and 2020-21 campaigns will amount to more than €5 billion.
Real Madrid won LaLiga last season, but saw their revenue fall by 8 per cent to €681 million, while there were declines of 3 per cent at Germany’s Bayern Munich, 8 per cent at England’s Liverpool, 16 per cent at France’s Paris Saint-Germain, after the Ligue 1 season was terminated early, 13 per cent at Italy’s Juventus and a startling 50 per cent at Portugal’s FC Porto.
Extending its analysis beyond these teams and into the current season, KPMG said: "While the 2019/20 season was the worst yet, the financial impact of the pandemic did not cease with its completion. Rather, the ripple effects of this crisis will still be felt in 2020/21, even if the season is played out in full.
"ECA (The European Clubs Association) estimates overall losses for the 2019/20 and 2020/21 seasons across clubs in the top divisions of Europe to be in excess of €5 billion ($6.1 billion) on operating revenues (excluding transfer impacts) and well over €6 billion ($7.3 billion) on bottom-line profits."
It added that Covid-19 was not entirely to blame for the financial strife of clubs, but that the crisis has shown weaknesses in their commercial models.
KPMG said: "It is crucial to note that, even prior to the pandemic, there was a general consensus that inflated players' salaries, coupled with growing transfer and agent fees, were placing significant strain on clubs' finances.
"The crisis has magnified these flaws in the current business model, where working from home is also not possible. In an industry already characterised by limited liquidity, minor disruptions paling in comparison to COVID-19, such as the volatility of qualification to certain competitions or player trading income, had already driven some clubs into real financial distress.
"The present global health emergency has further exposed the vulnerability of the football ecosystem and thrown its financial sustainability into question, even in the short term.”