Premier League Covid losses should give pause for thought

The authoritative Swiss Ramble reviews the impact of Covid-19 on Premier League and sounds a warning from his Zurich fastness. He states: ‘The size of the Premier League losses really should give pause for thought, so I’ll say it again: £1.4 bn over the past two seasons. In that period, six clubs have lost more than £120m. Although losses are smaller outside the Big Six, they are still significant in percentage terms.’

The COVID-19 pandemic has had a significant adverse impact on football clubs, though it is important to distinguish between money that has been completely lost to the game and income that has simply been deferred.

All Premier League clubs experienced a decrease in their revenue in 2019/20 – except the three clubs that were promoted from the Championship, who were boosted by the lucrative TV deal in the top flight. In total, I estimate that Premier League clubs lost £326m revenue due to COVID in 2019/20, split broadcasting PL £160m, match day £146m, TV Europe £13m and commercial £6m.

Of course, the COVID impact will have been much larger in 2020/21, as almost all games were played without fans. I have estimated £1,049m: (a) match day £698m (95% loss); (b) Premier League rebate £97m (media reports); (c) Europe TV £14m (rebate); commercial £240m (15% decrease).

Excluding those three promoted clubs, revenue for the other 17 clubs dropped £641m (13%) from £4,773m to £4,132m, mainly due to broadcasting, down £683m (25%) to £2,045m, though match day also fell £95m (14%) to £563m. Partly offset by commercial growing £138m (10%) to £1,520m.

There was little COVID impact on commercial income in 2019/20, thanks to existing contractual arrangements, only amounting to £6m lost and £13m deferred. The effect is likely to have been much higher in the 2020/21 season, as sponsors also struggled in the pandemic.

The largest revenue decreases in 2019/20 came at Manchester United £118m and Tottenham Hotspur £69m, both of whom were impacted by worse performance in European competitions, followed by Manchester City £57m, Arsenal £51m and West Ham £51m. In contrast, there were very small falls at Everton £2m and Burnley £4m.

Clearly, it is likely that the biggest revenue impact in absolute terms would be at the bigger clubs, on account of their higher revenue base. However, in percentage terms others suffered more: Bournemouth 27 per cent, West Ham 27 per cent and Wolves 13 per cent. Average decline was 13 per cent.

Five Premier League clubs will have lost more than £100m revenue due to COVID in 2020/21: Manchester United £155m, Tottenham Hotspur £142m, Liverpool £123m, Arsenal £116m and Manchester City £104m, with Chelsea not far behind at £97m. Then, there is a big drop to West Ham £39m.

Much of 2020/21 COVID impact is driven by match day, as virtually the whole season was played behind closed doors, so clubs earning a lot from this revenue stream miss out the most, e.g. Spurs £111m (following move to new stadium), Manchester United £104m, Arsenal £88m and Liverpool £80m.

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The Political Economy of Football V2

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