Sky 29/7/21 Deloitte: Clubs can bounce back from coronavirus and be more sustainable
Key findings from the finance company's 30th Annual Review of Football Finance, published on Thursday, reveal the combined football market across the 'big five' European leagues contracted by 13 per cent in 2019/20, down to 25.2bn euros (£22.1bn).
Football clubs can hope to emerge from the financial impact
of the coronavirus pandemic as more sustainable in the long-term, says
Deloitte's Dan Jones
Football clubs could emerge from the impact of coronavirus
as more sustainable in the long-term despite new figures from Deloitte showing
a European-wide 3.7billion euro (£3.4bn) reduction in revenue.
Key findings from the finance company's 30th Annual Review
of Football Finance, published on Thursday, reveal the combined football market
across the 'big five' European leagues contracted by 13 per cent in 2019/20,
down to 25.2bn euros (£22.1bn).
As initially reported by Deloitte in June, Premier League
clubs' revenue fell from a record £5.2bn in 2018/19 to £4.5bn over 2019/20 -
which was a reduction in total revenue for the first time as a lack of matchday
spectators coupled with a rebate and delay of some broadcast income hit home.
The impact of the Covid-19 pandemic - which saw football
shut down from March 2020 until the Premier League's 'Project Restart' behind
closed doors in June last year - produced a record level of clubs' combined
pre-tax losses of £966m, driven by the £648m revenue reduction and worsened by
the £126m increase in wages.
However, wage costs of Premier League clubs saw the smallest
increase since 2004/05, up by four per cent to £3.3bn in 2019/20, while the
aggregate total of player salaries remained largely 'flat' through Europe's
major top-flight competitions.
The English Football League reported a combined reduction in
revenue of 13 per cent to £943m in 2019/20 (£1.1bn in 2018/19) across the three
tiers.
The period covered by the latest Deloitte report only
crosses the early part of the pandemic - with the 2020/2021 season going on to
be played out, but for a handful of matches, mostly behind closed doors as
coronavirus restrictions and national lockdown measures were extended.
Premier League clubs are, though, expected to see a rebound
in the figures for 2020/21 before, should supporters again be allowed to attend
as planned, then pushing back towards setting a new high over 2021/22.
Dan Jones of Deloitte's sports business group feels the way
football has been rapidly forced to rethink its business model over the past 18
months could serve to see a lasting positive impact.
"This shows the story from the early stage of the
pandemic, the first signs of the (financial) hit," Jones said.
"It was the first time revenues had gone down in the
Premier League and there was a similar contraction across the whole of Europe,
the big exception being Germany, who got up and running before anybody else.
"It picks up fundamentally two things - the closing of
the gates, with matches going behind closed doors, and of fixtures being
deferred.
"So in some cases TV money for those games drifts over
into the next financial year (2020/2021), also of course there are rebates to
the broadcasters which does impact on this year.
"The long and short of it all is we have this reduction
of Premier League revenue for the first time ever in the 2019/2020 financial
year, but we expect that in 2020/2021 there will be a decent rebound.
"If you asked us this time last year what we were
forecasting it would have been for an all-time record in that financial year
because you would have had the new season and the additional revenue held over
from 2019/2020.
"Obviously this time last year we were not expecting
the whole season would be played behind closed doors - I don't think anyone was
envisaging that.
"We think for 2020/2021, it will be a bounce-back, but
we don't think it will be quite getting back to the highs of 2018/2019.
"Then for the 2021/2022 season coming up, it looks like
there will be no restrictions (on supporters at grounds), so it will probably
be a record year."
Tim Bridge, director of Deloitte Sports Business Group, says
the football industry will have to change to recover from the financial damage
done by the pandemic.
Jones feels a collective "tightening of the belts"
across clubs looking to restrict increasing wage costs against a severe decline
in revenues could lead to a much more stable environment.
He said: "If that carries on into when everything gets
back into full working order again, you could actually see clubs, after an
extremely nasty financial shock over the past 18 months, kind of come out of
this in a stronger position for the future because you have managed to put the
breaks on that wage inflation.
"The resilience clubs have shown so far, if they can
build on that they can make themselves much more sustainable than they probably
looked 18 months ago.
"The support and passion is clearly out there for clubs
at all levels in this country, so if that means we get to a more sustainable
position from here on, then that would be a good outcome."