Skip to main content

Covid hits revenue at leading clubs

The authoritative Swiss Ramble has been looking at the impact of the Covid-19 pandemic on European clubs.  He comments: 'Although it’s early days in the reporting period for football club accounts from the extended 2019/20 season, we can already see the significant impact of the COVID-19 pandemic in a few selected announcements from some European clubs.'

'Clearly, football clubs are suffering from the impact of the pandemic. This is only a small sample, but it is a sign of things to come at every club, namely large revenue reductions, partly mitigated by cost savings, covered by taking on more debt or capital put in by owners.'

Barcelona have estimated a further €65m reduction in revenue in 2020/21 from €856m to €791m, partly mitigated by including TV money for 2019/20 competitions completed in July and August. That would mean a total revenue loss of nearly half a billion (€471m) over two years.

Barcelona were keen to emphasise that without COVID they would have achieved their objective of reaching €1 bln revenue (including player sales) in 2019/20, i.e. growing €69m from €990m to €1,059m. However, the pandemic caused a €203m loss, reducing revenue to €856m.

It’s obvious that clubs lose match day income when playing games behind closed doors, but what is perhaps more revealing is the substantial reduction in commercial revenue via reduced sponsorship and lower retail sales. If that’s the case at Barcelona, what about others?

Some clubs have partially compensated for their revenue losses by reducing their wage bills, e.g. Juventus €43m (four months salary not paid from May to June), Barcelona€36m (70% cut during lockdown) and Lazio €18m (two months salary given up).

The Swiss Ramble states, 'By my calculations, the AS Roma €204m and Milan €195m losses are the second and third highest losses ever in Italy, only surpassed by Inter€207m in 2006/07. Not far behind largest ever loss of €219m by Manchester City in 2010/11. It is also worth noting that these terrible figures would have been even worse without some hefty profits on player sales.'

Labels:

Comments

Post a Comment

Popular posts from this blog

Threat of financial calamity removed from Baggies

West Bromwich Albion had effectively been in decline ever since the club was sold to a Chinese consortium in August 2016, paying a figure north of £200m to buy former owner Jeremy Peace’s stake. Controlling shareholder Guochuan Lai’s ownership was fairly disastrous for the club, but his unloved tenure finally came to an end after Bilkul Football WBA, a company ultimately owned by Florida-based entrepreneur Shilen Patel and his father Dr Kiran Patel, acquired an 87.8% shareholding in West Bromwich Albion Group Limited, the parent company of West Bromwich Albion Football Club. This change in ownership was urgently required, due to the numerous financial problems facing West Brom, including growing high-interest debt and serious cash flow concerns, following years of no investment from the former owner. Indeed, West Brom’s auditors had already rung the alarm bell in the 2021/22 accounts when they cast doubt on the club’s ability to continue as a going concern without making player s...
1 comment
Read more

Spurs to sell minority stake

Tottenham Hotspur is in talks to sell a minority stake in a deal that could value it at up to £3.75 billion and pave the way for Joe Lewis and his family to sever ties with the Premier League football club. Tottenham chairman Daniel Levy is seeking an investment that values the club at between £3.5 billion and £3.75 billion, including debt. While the terms of any deal have not been finalised, City sources expect Spurs to sell about 10 per cent. The club is being advised by bankers from Rothschild on the sale. Tottenham wants to raise fresh capital for new player signings and to help fund the development of an academy for its women’s team, as well as a 30-storey hotel next to its north London stadium. The financier Amanda Staveley, who brokered the deal for Saudi Arabia’s Public Investment Fund to take over Newcastle United, is understood to be among the parties to have expressed an interest in Tottenham. Staveley’s fund, PCP Capital Partners, has raised about £500 million to ...
Post a Comment
Read more

Fulham requires big funding from owner

After lengthy delays, Fulham’s shiny, new Riverside Stand has finally opened, creating “a unique Thameside destination with first class facilities for supporters and partners on match days, as well as for the wider community year-round”. This ambitious project has increased Craven Cottage’s capacity by around 4,000 to 29,600, while it has also taken advantage of the club’s fantastic location and wealthy catchment area by including two Michelin star restaurants, a rooftop swimming pool, corporate hospitality and event space, all benefiting from views of the Thames. Chief executive Alistair Mackintosh observed, “Fulham is the sort of club that can have a business class or first class and have fans that turn left on a plane.” Indeed, there is also an exclusive members club – with a football season ticket as an optional extra. It’s fair to say that “the times they are a-changing”, as this is a long way from the traditional pie and a pint. However, in a world where clubs face the tw...
Post a Comment
Read more