Footing the Bill: Premier League clubs lose big without any fan-fare
September 22, 2020
3 min read
What's going on here?
After the Coronavirus pandemic forced the suspension of the 2019-20 Premier League season in March 2020, all games were stopped. This stoppage, only recently lifted in mid-June, led to massive financial losses for the clubs whose effects experts warn may be long-lasting should similar financial impediments occur in the 2020-21 season.
What does this mean?
The head of Deloitte’s sport business group, Dan Jones, says that Premier League clubs can expect to show a £1billion loss in revenue for the 2019-20 season, with half of this being lost permanently. However, some clubs may have record breaking revenue numbers in the 2020-21 season because of the way in which broadcast deals will be paid. This may be more of a trick of accounting rather than an actual success story, with clubs still braced to face heavy losses for the foreseeable future until fans are able to return to stadiums.
What's the big picture effect?
Clubs are hoping for a V shaped recovery. What this means is a rapid return of fans to stadiums that will allow for financial growth quickly, alongside new broadcasting deals, which will prevent serious damage to clubs. However, there are several worrying signs. Clubs are being informed that they will only be able to have partial returns of crowds which has led to a projected £540million in lost income. This reduced capacity, of less than 33% and likely somewhere around 23%, is being forced upon teams as they must seek to make sure stadiums allow for social distancing. Many club bosses and executives have complained that there’s something of a double standard, with pubs and restaurants not facing as strict social distancing enforcements. However, when considering the difference in attendance, a few hundred at most compared to tens of thousands in stadiums, the reasoning becomes clearer.
Premier League Chief Executive Richard Masters said that “we are committed to having full stadiums as soon as possible, with safety always our priority”, but with Boris Johnson announcing tighter lockdown measures on 9 September 2020 it is likely that plans for fans to return on 1 October 2020 could be in jeopardy. Test events to determine whether or not fans can return to stadiums have been provisionally capped at 1000 people by the government, a move which the Premier League has criticised.
Another issue facing fans is the fact that of the 380 games to be played, only 220 will be broadcast live because of current broadcasting contracts. This is understandably a source of frustration for die-hard fans who are now unable to go in person to see these games. However, the Premier League is unlikely to want to renegotiate the £3.7billion broadcasting contracts currently in place, for fear this will make subsequent deals less valuable.
In addition to the cost to clubs of complying with enhanced cleaning and stadium management to reduce the spread of the virus, Premier League Clubs also need to pay over £330 million to Sky during next season, to compensate the broadcaster for losses sustained earlier this year when no games were allowed to be played.
Whilst the Premier League is desperate for its fans to return, the increasing number of coronavirus cases being reported across the country may prevent any plans to do so in the near future, causing ongoing problems for the clubs and their finances.
Report written by Hari Majumdar
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