BEVERLY HILLS, January 26, (THEWILL) – A financial crisis appears to be brewing with the potential to drag some football powerhouses who are not resilient enough down with it. For a combination of reasons most of which stem from the raging global health crisis, some of Europe’s elite football clubs are expected to miss out on over €2bn in revenue by the end of the current 2020/21 season.
In financial report after financial report, the dark clouds of losses loom over the horizon, threatening the balancing of club books to the point of insolvency, if nothing happens to arrest the slide occasioned by the pandemic and the global financial downturn.
Recent figures in the Deloitte’s Football Money League report published on Tuesday also include missed amounts from the end of the last campaign which only serves to worsen an already negative situation for European sides.
In the Football Money League report, the top 20 highest-earning clubs in Europe suffered a 12 percent drop in combined revenue from the previous season with an earned total of €8.2bn.
Izzy Wray, Deloitte’s Group Sports Business Manager, gave this explanation for the reduction:
“The composition of that 12 per cent reduction is a combination of reduction in match day revenue, of course, from having no fans in the stadiums for the postponed seasons, broadcaster rebates as a result of the seasons either being cancelled or postponed.”
Since the previous season, especially when football resumed after the lockdowns, the majority of games have been played without fans in stadiums, resulting in an immense loss in matchday revenue for top European clubs, a situation that is most likely to remain close to zero for some time to come.
“We’ll definitely see more digital fan engagement, and, so, I think that’s something that clubs have been very focused on this season, and a lot of them have seen some relative success in that.
“So, I think we’ll see that sort of continuing and clubs looking for more innovative ways to engage with fans digitally, even when fans are able to go back to stadiums.”
This has seen some of the biggest clubs across Europe having to tighten their expenditures to minimise the overall impact these deficits of revenue generation will have on the general financial health of the club as a whole, especially taking wage bills and other financial commitments into consideration.
For instance, Barcelona may have missed out on the Spanish title last season, but the Catalan club retained the top spot in terms of annual revenue totalling $790.5 million. Yet, even this was far less than the revenue in excess of €1bn euros they had initially projected for the year as reported by THEWILL in October.
In addition, the financial crisis was so debilitating that their top spot earning for the previous season was eclipsed by the fact that Barca suffered the second largest revenue fall among the clubs on the list, down from a record breaking $959 million.
With fans not expected to return soon, smart financial thinking and renegotiations of cash commitments might be the way out of impending insolvency threats facing Europe’s biggest clubs.
About the Author
Jude Obafemi is a versatile senior Correspondent at THEWILL Newspapers, excelling in sourcing, researching, and delivering sports news stories for both print and digital publications.
