Report finds £500m of Premier League revenues ‘permanently lost’ due to pandemic

By David Owen

June 11 – Covid-19-related disruption is expected to cut aggregate revenues of the 20 Premier League clubs by approximately £1 billion, or £50 million each on average, in 2019-20, according to analysis in the new Deloitte Annual Review of Football Finance.

But the professional services firm anticipates a quick rebound in 2020-21, with revenue related to current-season matches that are delayed beyond the end of this month being rolled over, rather than lost altogether.

As a consequence, while coronavirus-related disruption might continue into the 2020-21 season, the 2020-21 financial year may yield “record-breaking levels of revenue”.

All told, Deloitte thinks just under half of this year’s anticipated £1 billion hit could be permanently lost, with just over half correspondingly deferred until 2020-21.

Dan Jones, head of Deloitte’s sports business group, said the ongoing pandemic was expected to cause “significant revenue reduction and operating losses across European football” in the current season. However, he added, the industry would be “hopeful that a V-shaped recovery and a return to relative financial normality for the 2021-22 season is possible”.

Deloitte’s assessment of the pandemic’s likely impact on club football’s most valuable national league is lower than that implied by Tottenham Hotspur’s statement last week, when it disclosed that a wholly-owned subsidiary had issued £175 million of commercial paper through a UK Government facility.

Spurs said then that its estimated revenue loss “may exceed £200 million for the period to June 2021”. Depending on one’s assumptions – – this appears to equate to a projected revenue loss of around 30%. A similar revenue loss across the entire league would imply a hit of up to £2.2 billion over the 16 months to June 2021.

Aggregate revenue of the 20 Premier League clubs in 2018-19 reached £5.16 billion.

According to Deloitte, the European football market as a whole generated a record €28.9 billion over the year covering the 2018-19 season. Of this, the ‘Big Five’ European leagues – the Premier League, Bundesliga, La Liga, Serie A and Ligue 1 – produced €17 billion, amounting to year-on-year growth of 9%. It was clubs in these Big Five leagues that received the majority of the additional €700 million of distributions from the European football body UEFA to clubs in its competitions.

Deloitte said that revenue polarisation between and within European football leagues continued to grow and was “likely to be exacerbated” by Covid-19. This was because “the biggest clubs are likely to have the most contractually protected revenues, whilst smaller clubs rely more heavily on match-day revenue and single season commercial agreements”

The report said that clubs in Spain’s La Liga generated combined revenues of €3.4 billion in 2018-19, surpassing the Bundesliga at €3.3 billion. However, “the earlier return to play of matches in the Bundesliga during the disrupted 2019-20 season will likely see the German league report higher revenues than La Liga in 2019-20”.

La Liga “is expected to return to being Europe’s second highest revenue-generating league from 2020-21”.

Italy’s Serie A  was said to have generated €2.5 billion of revenue in 2018-19 and France’s Ligue 1 €1.9 billion.

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