Premier League clubs’ overall revenue is estimated to take a £1 billion hit for the 2019/20 campaign as a result of the global health pandemic, according to Deloitte’s ‘Annual Review of Football Finance 2020’.
As the Premier League looks to resume on 17 June, due to revised schedules and behind closed door fixtures, matchday revenue will significantly drop for the season, moreover, broadcast rebates have also been identified as another cause of England’s top-flight suffering a potentially huge revenue drop.
The report stated: “The huge disruption to the 2019/20 season caused by COVID-19, with a quarter of the season delayed until at least June and July and played behind closed doors, will trigger the first-ever drop in Premier League revenues.
“The fall is made up of two elements – 1) revenue delayed until the following financial year when the final games are played (football accounting years typically end in May or June) and much more seriously, 2) revenue permanently lost due to the impact of the pandemic.”
In total Deloitte estimates that around £330m in rebates has been agreed to the Premier League’s domestic and international media partners ‘in recognition of the impact to broadcasters’ revenues from the extended absence of live matches, subsequent disruption to planned schedules and the loss of subscribers’.
Premier League and Championship clubs recorded historic combined revenues in the 2018/19 season, with the country’s top division sides garnering over £5 billion for the first time (£5.2 billion). Meanwhile Championship clubs’ combined revenues rose 5 per cent from 2017/18 to £785 million last season.
However, despite growing revenues Dan Jones, partner and head of the Sports Business Group at Deloitte, has warned that the financial situation in the Championship continues to be worrisome, particularly as the coronavirus pandemic impacts 2019/20 figures.
He said: “2018/19 saw record revenues of £785m in the Championship, as three established Premier League clubs relegated in 2017/18 returned to the second-tier. These clubs also brought large, though reduced from Premier League level, cost bases with them.
“The trend, identified in numerous previous editions of this report, continued as the spending behaviour of EFL Championship clubs remained unsustainable without owner funding, with the pursuit of promotion to the world’s richest league continuing.
“For the fourth time in seven seasons, record-breaking wages to revenue ratio (107%) demonstrated the collective lack of control. In no other industry would such a metric be viable, and whilst football benefits from the desire of many to fund those losses, the impact of the pandemic on club owners’ broader finances and business interests brings the question of long-term sustainability into sharper focus than ever.”
Other key factors included in Deloitte’s report included a significant increase in European club revenues with the continents ‘top five’ divisions (Premier League, La Liga, Serie A, Bundesliga and Ligue 1) generating £15 billion, up 9 per cent from last 2017/18. Moreover, the Sky Bet League One clubs had its highest aggregate revenues, recording £191m, whilst League Two matched its previous record of £91m.
To see Deloitte’s complete ‘Annual Review of Football Finance 2020’ then click here.