Pro League clubs to suffer 25 per cent revenue drop from cancelled season
The premature end to Belgian soccer’s Pro League this season will lead to a 25 per cent decrease in total revenues for its clubs, according to the findings of a new report released today.
Professional services firm Deloitte, which produced the report on behalf of the Pro League, said the revenue slump will largely be the result of a drop in ticketing, sponsorship and commercial income.
The cancellation of the 2019-20 Pro League season was officially ratified last month after the league’s board of directors in April made a recommendation to its 16 clubs to terminate the remainder of the campaign because of the continued uncertainty regarding the coronavirus pandemic.
Sam Sluismans, partner at Deloitte Belgium, said: “Although too early to say as we do not have the exact numbers yet, we estimate the total impact of the premature end of the 2019-20 season will represent a decrease of around 25 per cent of total revenues, mainly due to a drop in ticketing, sponsoring and commercial revenues.
“Furthermore, the transfer market, which has been very active in recent years, will potentially suffer the effects of this crisis and further affect the situation of the Belgian clubs, as transfers are a very important aspect of the business model of our Belgian clubs.”
The financial impact of the pandemic will stunt the revenue growth of the Belgian clubs after Deloitte and the Pro League today revealed that combined turnover of the teams rose by 18 per cent to €378.5 million ($425 million) in the 2018-19 season.
The figure was up from €321 million in 2017-18 and €313 million in 2016-17.
The two parties once again worked together to release the third ‘Socio-economic impact study of the Pro League on the Belgian economy’, which is described as a report that “quantitatively and qualitatively measures the socioeconomic impact generated by Belgian professional football.”
Deloitte said traditional revenue sources like ticketing, sponsorship and advertisement, broadcasting, commercial, as well as prize money from Uefa club competitions experienced “significant growth.”
Uefa prize money for Belgian clubs doubled from the previous season, with the figure jumping to €63.6 million. The increase has been put down to the relatively successful performances of the country’s representatives in Europe.
Broadcasting fees, which account for 22 per cent of total revenues, increased to €84.3 million compared with €80.9 million in the previous season. Sponsorship revenues came in at €76.2 million, up from €68.2 million in 2017-18.
Despite the growth in revenue, Belgian clubs recorded a combined loss of €91 million for the 2018-19 campaign, almost double the €48 million posted a year earlier.
This was put down to a lower net transfer result, increasing agent fees and player salaries.
Sluismans stated that “controlling the costs will be a key challenge for the Belgian clubs to improve the bottom-line results.”
This season’s financial results could take an even more significant hit as the Pro League is involved in a dispute with outgoing broadcast rights-holders Proximus, Telenet and Voo, the Belgian telecoms firms, which are seeking refunds for advanced rights payments made for the final portion of the season.
Telenet appears to be taking the strongest approach, recently threatening to sue the league if it does not receive a reimbursement.
The telecoms trio, which will be replaced by Eleven Sports, the international subscription broadcaster, from next season, paid a combined €80 million per year for the rights.
The remaining games on the Pro League calendar included the season-ending championship play-offs featuring the top six teams and determines the league winners.
There was also one round of games in the regular season outstanding.
But the revenues of the Pro League clubs will be boosted by that new broadcast agreement with Eleven, which will be worth €103 million per year until the end of the 2024-25 campaign.
Deloitte’s report also pointed to a decline in transfer fees as a key reason for a drop in profits last year, falling from €73.3 million to €22.4 million.
Lower outgoing transfer activity with the big five leagues – England, Spain, Italy, Germany and France – in 2018-19 compared with 2017-18 resulted in lower transfer revenues for the clubs and partially explained the drop in net transfer result, Deloitte said.
Sluismans added: “This year’s result shows again the importance of transfers in the business model of our clubs. The best way for continued success in the transfer market is by keeping the focus on developing talent in the national youth academies. While we do not have the numbers yet for 2019-20, we did see high activity on the transfer market and we can expect an increase in next year’s net transfer result.”
According to Pro League chief executive Pierre François, in 2018, clubs invested €50 million on youth academies despite only being legally required to invest €23 million.
The Deloitte report also estimated Belgian soccer contributed €1.1 billion to the local economy through ticketing, sponsorship and merchandise, which represented an increase of 21 per cent on the prior year.