BackWhy European football clubs might take to playing behind closed doors
As and when there is more clarity and control over covid-19, a return to football behind closed doors might be prudent
PremiumAs the Coronavirus lockdown looms large, every sporting league today faces a question: to cancel or not? Nowhere is this question more relevant than in European club football, which has frozen in its tracks towards the business end of the current season. Football in the major national leagues, and continental competitions have been suspended indefinitely.
Given the toll the Coronavirus pandemic has exacted, and the inability of science to tame it yet, full normalcy seems far-fetched. But the footballing world is sending out feelers. The German Bundesliga allowed clubs to return to team training from April 6, albeit with restrictions. On April 7, ruling out a cancellation of the season, the president of Spain’s leading league, Javier Tebas, pitched for a late-May/early-June resumption.
Given the financial stakes and questions of continuity, a resumption behind closed doors—with only players on the field and no spectators—is a preferred option over abandoning a season that is two-thirds done. And that too only if and when covid-19 is under control.
Football is a game of the people. The supporters who throng the stands are its heart and soul. While playing in an empty stadium is not ideal, it will limit losses. On April 7, Tebas said abandoning the Spanish season would cause a loss of €1 billion, but a closed-door finish would restrict the economic damage to €350 million. The prognosis for other top European leagues is similar.
Football clubs have several sources of revenue, with the four principal ones being broadcast, sponsorship, commercial and gate receipts. The current lockdown has impacted all of them. However, if games are played behind closed doors, clubs will be able to unlock three of those four revenue streams, though still probably not in full.
The exception is gate receipts (ticket sales in stadiums). This is the third-largest revenue stream, accounting for 15% of the €21 billion aggregate revenues earned by European football clubs in the 2017-18 season. Resuming behind closed doors, the loss would be roughly for one-third of the season.
The ensuing lockdown is likely to exacerbate the massive inequalities that exist among various European clubs and leagues. The Big 5 leagues (England, Spain, Germany, Italy and France) and the superclubs among them (like Barcelona and Manchester United) enjoy massive financial clout. They can leverage their global reputation and popularity to realize large sums from sponsorship and merchandising, but clubs in smaller leagues remain much more dependent on gate receipts.
The 15% figure for gate receipts is an average for all leagues in Europe. When you break it down by country, it covers a wide range: 13% in England to 43% in neighbouring Scotland. It is clubs in smaller leagues that will suffer the most if games are played behind closed doors.
Even in bigger leagues, the loss of matchday revenues will be significant. Just 20 clubs account for nearly half of all gate receipts in Europe. A club in the English Premier League (EPL), on average, earned 36.2 million euros from gate receipts in 2017-18. But, across clubs, this ranged from 125 million Euros for Manchester United to 6 million euros for Burnley and Bournemouth. At the EPL lower end, it’s below even the average in Netherlands and Switzerland.
A Burnley stays afloat because of broadcast revenues. On average, the EPL distributed 140 million euros per club as broadcast revenues from its central pool of TV rights. The chairman of Burnley has stated the club is likely to face a shortfall of 50 million pounds if the season is not finished.
The disruption to the current, and next season, threatens the profitability and even survival of some football clubs. Even in a regular season, a large number of clubs don’t turn a profit. In the 2017-18 season, the number of clubs that earned a net profit ranged from 90% in the Spanish La Liga to 22% in the Turkish Super Lig.
The shock from covid-19, and the uncertainty around sponsorship deals and even player transfers, will weigh heavily on most clubs. It will serve to widen the wedge between the haves and have-nots in European football. This will further cascade to the lower leagues in each country.
If football does not resume by the end of June, this season will be lost. It has managed to buy some time. The country-level European competition, which was to be held from June 12 to July 12, has been moved to 2021. That period is now also available for European club football to catch up. And they would like to do that, even if it’s behind closed doors.
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