By Christophe Jost
The virus’s effect on our daily lives is now visible and for the moment all we can do it simply hope people will find ways of avoiding catching it – by taking precautions and helping each other.
Regarding the human dramas that have emerged and those yet to play out, football may be seen as frivolous. But for those of us here, and hundreds of millions elsewhere, football is part of our lives, it fuels our curiosity and passions, and gives rhythm to the seasons, the weeks and particularly the weekends.
So let me try to think ahead and try to understand the consequences of what is happening.
On a German TV show yesterday, a lower league club manager said between now and the earliest date games may resume in the Berlin area – the club had nine games planned, each game would generate about 130,000 euros of income, which puts the basic loss at more than a million euros.
I did not hear which club he was talking about, and have no idea of the stadium capacity, but this being a 2nd division German club, but it gives an idea of the sort of losses one ordinary team could have.
Then we can try to think about the overall impact on clubs of the two top Bundesliga leagues and multiply it up to all the main leagues in Europe where clubs will be hit just as hard. And this is not a theory, it is a fact.
And of course in England Premier League and Championship League clubs will be hit as well, and their losses measured in multiples of those suffered by the Bundesliga clubs.
Now this is not pure speculation that I am writing about. You can bet that all Premier League clubs have set up a Situation Room and are working 24/7 to try to prepare themselves for a possible Armageddon. The money will run out.
Meanwhile, you have all those blogettas starting to play fantasy football again and taking all readers for idiots, suggesting all the players that are about to be signed – as if the shut down is going to have no financial impact on the clubs.
Indeed I am surprised no one has tried to think through what will happen next…. we are looking at an industry with a massive revenue that has just stopped rolling in. The financial and social implications are enormous.
And yet, amazingly, the financial implications are a non-subject. Then again, incompetence runs ripe from the management levels of the organising bodies, through PGMOL all the way to what is called the ‘press’. So maybe that lack of coverage is not surprising.
So…let’s do their job for them and go through the real consequences of what is happening.
Each European club will most probably lose millions in revenue; the bigger the stadium the more they will lose. Sure, some may have a sort of insurance scheme in place, but most will not. And they will have no way of recovering that lost revenue.
The first very basic consequence is that all people who have jobs linked to the games will be losing those jobs. How many stewards are employed at the Emirates? What of the impact on supporting jobs like cleaning, security, transport, etc?
Draw a circle one mile around the stadium and you’ve got a ground zero in terms of economic impact. Pubs, stores, taxi drivers are all going to review their business and watch their finances collapse. Ground zero for each club will not be a nice place to have a business.
Now, on the club level, the missing millions will have an immediate impact on daily life. Some clubs with a good financial situation – Bayern is an example – should be able to weather the storm and come out losing just a few feathers.
Others have taken precautions – some in the Bundesliga quietly took the route of getting liquidity loans. But the others that have taken no precautions are now entering a very worrying phase. They have all the expenses of paying players etc but none of the income.
So I’m now fast-forwarding to July 1st 2020.
You’re a player and your contract just ran out. I’d venture your chances of getting as good a contract as you had will be nil, unless you are one of the best players in Europe or playing in a state/billionaire owned club.
It may well happen that UEFA and/or FIFA, trying to save the financial chaos, will then change the rules for agents in an attempt to bring transfer fees and salary prices down. But if I were an agent, I’d still be worried stiff.
So the players with a contract ending on June 30th are not looking into a shining future. With club income non-existent few clubs will be willing to take on a player’s salary without knowing when the club is going to start earning money again.
My bet is that the rich clubs may grab a chance here or there to pick up a new player – but they still will have to deal with FFP, and the revenue lost from not playing games will lower the global financial envelope – the more so with rich clubs as their revenue loss will be higher.
So that will leave many players who thought about moving to another club changing their minds. The thought now will be of running their current down to the end.
Maybe some clubs will lower the fee demanded for players to get an early transfer to lower their overall wage bill, but unless the ‘buying’ club has the money to pay the same as the player was getting, it may well be that these transfers will simply not take place. My bet is this summer will see some sort of stability.
The clubs which will fare better are those with young players and those with very good players with long term contracts.
I’d say in this regard, Arsenal are not in such a bad position: they have a low debt, financial stability and many young players with a few senior squad members who can be decisive in games.
I’d say Tottenham could be ok in terms of the squad, but the financial hit may be much worse with their new stadium and the debt that comes with it. Their business model of playing football and NFL games to full stadia may just have taken a bad hit.
But the elephant in the room is TV rights. How are those going to be cut? Because cut they will be.
Subscribers will be screaming for a refund and although BT Sport, for example, has just refused to refund subscribers, some form of refund will come. This will be the second ground zero. TV will lose millions.
The nice side effect maybe many of those talking eggheads who tell us how to interpret football could soon be gone, out of what they call “a job”.
Playing in closed stadia may help the TV companies at least broadcast some football, but as we’ve seen with the PSG-BVB game last week, the game is just not the same. Will people watch? At best I believe we are going to see a giant downsizing of football.
And, contrary to what is going on in the US where owners do work together and are pretty good at protecting the whole of their sport, nothing of the sort exists in European football, or in the PL.
Add to that the fact that there is no real active and efficient players’ association to represent and defend the players, and you have a real problem looming on the horizon. I’d say this was the last season of excesses in European football.
So what can we do?
Basically, sit back, enjoy the ride as for European football, Winter is Coming.
And come spring, we may find ourselves watching a game that was cleaned up and which will be more enjoyable and less predictable than it has been for years.
That’s a great read, some worrying points, but perhaps a chink of optimism at the end that something better may emerge out of the game, it certainly needs to
Great article Christophe! We might see the end of football as we have known it for a while….
All products go through a life-cycle: introduction, growth, maturity and decline. The Premier League before this happened was in decline because of match fixing etc. This pandemic is one of the final nails in the coffin and if what you say above happens – the dismissal of talking heads – I might begin to enjoy the game once again.
There is another issue that has not been talked about. All of Europe is tackling this pandemic one way, the UK is doing the opposite.
Has anyone thought about the impact this will have on person movements ? Will Europe forbid Uk visitors once the virus is beaten or under ‘control’ ? Or the other way around ? What is a european football player going to think about coming to the UK to play ? What the other way around ?
The fallout of the whole situation is much larger then we may think.
Who knows. With this virus, completely uncharted territory it seems.
Just hope the players and supporters are soon back in the stadia, football has learned a few lessons, and Mike Riley is no longer in post, as soon as possible
Does anyone get the impression that the media are like Nero, fiddling while Rome burns? Excellent expansion on my article and touches many points that the incompetents at FIFA,EUFA, the sweet FA, PIGMOB and the British politicians have, as yet to consider or maybe(horror of horrors) not even aware of yet! Can you imagine Bumbling Boris and his 3 ring circus getting to grips with the disiaster train barrelling down on them? Look at Trump’s ridiculous,disjointed, farcical, knee-jerk response to this crisis in the US.
Mandy, I love your optimism bordering on fantasy but the reality will be that, once the wave breaks, sweeps away countless people who should have been properly protected but weren’t because our ¨leaders¨ were too busy saving face, these self same weathervanes will take ¨full credit¨ for having saved Britain and all things British, despite the greasy Johhny Foreigners incompetence! The media ,will of course, merrily tag along. I can guarantee that once this is under control, NOTHING will have been learned by these idiotic fools but one thing; their money is still safe and people still ¨trust¨them……
Thought provoking article.
Football survived two world wars and will no doubt be around after Coronavirus, because it is a passion for supporters. But if we just look at football as an industry, then presumably the chips will fall as they may based on economics. So clubs that are in the weakest financial position, particularly those with commercial debt, are likely to suffer most. So Arsenal likely to fare better than most (in the english PL), i’d guess.
Less money in the game will cascade down, and we may look back on the period between pay tv coming into football and Coronavirus as a sort of golden age, at least financially. A cash strapped pay tv won’t be able to offer the same deals, salaries transfers and everything else will settle at a lower level, including hopefully ticket prices.
Or maybe none of the above!
DG……….I’d rank your financial forecast predictions for the Club’s potential actions in response to this crisis as follows;
A) Top club priority….maintain the current TV/media deal and maybe improve it.
B) 2nd priority…..under the guise of austerity and balancing their finances, start to cut current and future salaries for non stars (youth, benchwarmers, older players etc. This is the highest risk strategy and could backfire easily.
C) 3rd priority (barely behind their 2nd priority ) ……offer less in transfer fees and negotiate reduced agents’ fees, especially for desperate, older or lesser players seeking a new club.
D) 4th priority ………reduce wages and benefits to non-playing employees (other than Board members, managers and coaches, and important support staff) and reduce their numbers, increasing the workload on the remaining wage slaves.
E) 5th priority …..cuts as many benefits and perks for their supporters as possible, thus reducing costs further.
F)A distant 1,000,000th priority…..reduce ticket prices. However this is so unlikely that my guess will be rather an increase in ticket prices, concession costs and membership fees across the board, but slowly and almost imperceptibly, using the ¨balancing the budget¨ BS as justification.
G) An interisting option …..petition the government to bail the rich clubs out because Football is too big to fail and the politicians are too weak and fearful to resist. Using fan and supporter outrage, they can squeeze the government by reminding those lily-livered slugs that Football supporters are voters as well.
How’s that for thought-provoking?