Premier League clubs endure losses up to 1 billion from hosting matches behind closed doors

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According to updated numbers from finance firm Deloitte for the 2019-20 season, Coronavirus restrictions drove Premier League clubs to suffer a revenue drop for the first time. Revenue fell roughly 13% due to a shortage of matchday attendance, as well as a rebate and a delay hurting some broadcast money, despite the 20 top-flight clubs bringing in a combined 4.5 billion pounds.

As the actual financial cost of the pandemic becomes evident, a cumulative pre-tax loss of about 1 billion pounds was also the highest in Premier League history. It was about five times the previous season’s 200 million amount.

Dan Jones of Deloitte’s sports business group stated, “The decrease in revenue in the 2019-20 season is, unsurprisingly, down to the global economic and social disruption caused by the Covid-19 pandemic and will continue to have a heavy impact on the 2020-21 season’s financial results when available. The absence of fans, postponement of matches and rebates to broadcasters had a significant impact on the revenue clubs have been able to generate.

Premier League matches were played behind closed doors (photo via Yorkshire Live)

The full financial impact of the pandemic on the Premier League will depend on the timing of the return of large numbers of spectators to stadiums, as well as teams’ ability to maintain and build business connections, especially at a time when many other businesses are suffering. Fans’ absence will be more fully reflected in the financial results of the 2020-21 financial year, as matchday operations are a cornerstone of a club’s economic strategy.

Premier League clubs have the potential to recover to record income levels once fans are able to return in full, which should happen around the 2021/22 season. The league’s TV contracts will be renewed, but in the interim, player pay have risen to 72 percent of club revenue in 2019-20. This was due to a drop in income, as wages only climbed by 3% in real terms.

Deloitte’s Tim Bridge stated, “in this extraordinary year it is difficult to read too much in to whether this marks a shift in clubs’ approach to wage spending, or one-off elements such as the absence of end-of-season bonuses, which will have been deferred to the next financial year, or the impact of temporary wage cuts or deferrals. With wages always representing the largest cost for football clubs we will watch with interest in years to come to understand whether this financial shock will come to be seen as having caused a change in approach and greater control over wage expenditure.”

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