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Wednesday, November 25, 2020

Coronavirus Pandemic to Cost Football Billions in 2020

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While cultural events are being called off and bars are closing again, the football industry is trying it’s best to avoid any worst-case scenarios after professional football was suspended for 4 months in most leagues in Europe.

In most European countries football games are still played, despite the intelligent lockdowns across the continent, but no or few fans are allowed in the stadiums. At the same time, pharmaceutics are spreading some rays of hope as the corona vaccine might just be available by the end of this year.

Even so, we can’t say things are running flawlessly. At Betsafe we expect some difficult times to occur for European football from both a sportive and financial point of view. Clubs can get into serious trouble if they are unable to fulfill their (contractual) obligations towards sponsors and season ticket holders, but especially towards the broadcasters. We’ll take a closer look at the far-reaching impact of broadcasters in European football.

Football without fans is nothing

Every week games are still being played without the fans; professional clubs lose income. There is a rapidly growing liquidity problem in professional football and the industry depends on national governmental decisions, while television sports channels also have their say, to say the least.

To illustrate this, we’ll need to go back to when football competitions in the whole world decided to postpone their leagues. In the Premier League, this happened in March and at the time there were still 9 games to be played by each team — representing a stake of a billion euros.

A quick calculation shows us that rights holders Sky Sports and BT still had to broadcast about 530 million euros worth of matches, while sport channels from outside the UK had about 350 million euros of games left to transmit.

The dilemma here? That these rights holders have the contractual right not to pay out all of these millions if the Premier League teams weren’t playing the remaining games. While other countries decided to fully cancel their league, teams in the Premier League had no choice to play the games.

Players showing solidarity

Clubs across the whole of Europe, especially the smaller ones, were badly affected by the corona crisis. The Spanish Football Association made 500 million euros available for the teams that ran into problems, and at various German clubs, players were willing to give up their salary.

Players of Bayern Munich and Borussia Dortmund donated 20 percent of their wages to save their clubs. Borussia Dortmund communicated the gesture of their players “would save a total of tens of millions of euros”.

Some would say that football clubs already have enough money to weather the storm, but it’s their employees that lose their job first. Groundskeepers, people working at the ticket office; people who earn basic salaries and have families.

Dortmund communicated that their players helped them “to remain one of the largest employers in the city of Dortmund during the corona crisis.” All across the world, players showed their solidarity to their clubs and fans, something broadcasters failed to do.

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