Football braced for financial impact from virus outbreak worldwide

Domestic club football across much of Europe has been halted completely due to the coronavirus pandemic, with Germany following France, England and Scotland in suspending their competitions on Friday, while UEFA has postponed Champions League and Europa League games due to be played next week.

Numerous countries had been initially planning to carry on playing matches behind closed doors, following the example of several Champions League and Europa League games this midweek, but that was not to everyone’s liking.

“My opinion is that all competitions should be suspended. In China they have been more responsible than they have been in Europe,” said Andre Villas-Boas, the coach of French club Marseille who previously worked in China, where more than 3,000 people have been killed by the virus.

However, there is also an economic reality, with clubs dependent on income from ticketing and matchday hospitality, as well as from TV deals for broadcasting matches.

“At the end of the day, it’s about financing professional football,” Bayern Munich chairman Karl-Heinz Rummenigge warned when asked if it might be better to stop playing football in Germany for the rest of the season.

“If payments due from broadcasters don’t come in, a lot of small and mid-size clubs will have liquidity problems.”

According to a study by Spanish radio station Cope, La Liga clubs would lose a combined total of over 600 million euros ($665m; 536 million pounds) in income from television and ticketing if no more matches were played this season.

The impact on certain clubs could therefore be extremely serious, and the knock-on effects considerable in a country where almost 200,000 people have employment related to football, and where the sport represents 1.4 percent of GDP, according to La Liga.

In England, Premier League clubs who have profited from huge television deals should be able to handle a few weeks without matches, but the effects will immediately be felt elsewhere, with games in the Football League, the three divisions below the top flight, postponed as well as in the Women’s Super League.

“For the rest of football, it’s quite different (to the Premier League) as they rely on gate receipts and commercial activities, with a very small part coming from the media,” Peter Coates, the chairman of second-tier side Stoke City, told the BBC.

“This will have serious financial implications, with some clubs possibly running out of money.”

In a country like Scotland, where there are no big broadcast deals to offer a safety net, the situation could quickly become dire.

Ominously, Scottish Professional Football League chief executive Neil Doncaster has warned clubs “to examine their insurance arrangements in case of matches being affected.”

While nobody could realistically have seen such a scenario coming, the next few weeks will at least be a test of how well run many clubs around Europe are.

Postponing matches by a few weeks is preferable to carrying on playing games behind closed doors precisely because money from broadcasters will eventually come in along with revenue from ticketing, sponsors and hospitality. However, there are still major concerns.

“The real immediate problem is cash flow because none of that will come in for at least a month. That is where we will see which clubs are well run and have a healthy economic model,” pointed out Jean-Pierre Caillot, the president of French Ligue 1 outfit Reims.

In the meantime, TV companies who have paid vast sums for those broadcast deals now have no live games to offer their paying subscribers. Across Europe, they will have to adjust accordingly in the coming days and weeks.

Agencies