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Deloitte predicts €2bn revenue loss for football’s richest clubs

Professional and financial services company Deloitte has forecast that the 20 highest revenue-generating football clubs will have missed out on over €2bn (£1.78bn/$2.43bn) in revenue by the end of the 2020-21 season amid the ongoing impact of the COVID-19 pandemic.

The 24th edition of the Deloitte Football Money League profiles the financial performance of the 20 clubs during the 2019-20 season, which was severely impacted by the COVID-19 outbreak last March. Deloitte’s report found that clubs generated €8.2bn in 2019-20, a 12% decline on 2018-19’s figure of €9.3bn.

Deloitte cited a €937m drop in broadcast revenue and a €257m fall in matchday revenue as reasons for the decrease, which was offset by a €105m increase in commercial revenue. The outlook for the following 12 months is set to be even bleaker, with Deloitte predicting that matchday revenue “will likely be close to nil from March 2020” as stadiums remain empty.

According to Deloitte, the average revenue generated per club in the Money League during the 2019-20 season was €409m, compared to €464m in 2018-19. The disruption caused to the 2019-20 season has resulted in clubs’ revenue generated for this campaign being spread across two financial years ending in 2020 and 2021.

The majority of Deloitte’s analysis in this year’s Money League focuses on the financial year ending 2020, resulting in a deferral element and a permanently lost element to the reduction in revenue. In most clubs’ cases, this meant that approximately one quarter’s revenue from the financial year ending in 2020 has been shifted to the financial year ending in 2021.

The €257m drop in matchday revenue came as matches were first postponed, then either cancelled or resumed behind closed doors. The full impact of the absence of fans will be reflected in next year’s report, with almost all of the 2020-21 campaign being played behind closed doors.

Dan Jones, partner in the Sports Business Group at Deloitte, said: “Leagues across the world took different approaches in response to the pandemic with respect to their seasons, ranging from postponement to termination, with final standings determined using different methodologies, to others being annulled entirely.

“There is no doubt that this is one of the most testing times the football industry has ever had to endure. The absence of fans, postponement and cancellation of matches, rebates to broadcasters and the need to satisfy commercial partners have all significantly affected the compilation of the 2021 Football Money League. As a result, the comparability of relative performance between clubs in this year’s Money League is more challenging than usual.”

Deloitte conducted a global survey in late 2020 of fans in over 20 countries, gathering thoughts on the potential return to stadiums, fan engagement and general consumption of football. Of those surveyed, 93% said they planned to attend a football match when it is permissible to do so, with 52% stating that they would return immediately.

Over 15% of fans said they would wait longer than six months to return to matches. Over half (56%) of fans that were season ticket holders prior to COVID-19 opted to renew for 2020-21, despite the risk that they would not be able to attend matches. The main reason cited for renewal was that fans wanted to retain their position as a season ticket holder.

On fan attendance, Jones added: “The safe return of fans to stadia in significant numbers is one of the highest priorities across global football. Matchday operations are a cornerstone of a club’s business model and help drive other revenue-generating activity. Fans’ absence will be more fully reflected in next year’s Money League. The final size of the financial impact of the pandemic on football will depend, in no small part, on the timing and scale of fans’ return.”

Barcelona remained top of this year’s Money League ahead of Spanish LaLiga rival Real Madrid. Barcelona did however suffer the second largest revenue fall in absolute terms of any Money League club, following a record-breaking 2018-19 season which saw it become the first team to break the €800m revenue barrier. Barcelona’s retention of top spot came amid a year of significant financial struggle for the club and it has now emerged that the LaLiga giant has liabilities of €1.173bn.

German Bundesliga side Bayern Munich rose to third in the Money League, marking its first top-three placing since 2013-14. Bayern had the smallest revenue decrease (4%) of the Money League top ten as it benefited from being able to recognise all domestic broadcast revenue for the financial year as the Bundesliga season finished earlier than other leagues.

English Premier League team Manchester United slipped to fourth place, with Liverpool entering the top five for the first time since 2001-02. The top ten was completed by Manchester City, Paris Saint-Germain, Chelsea, Tottenham Hotspur and Juventus.

Eighteen of the 20 clubs were also present in last year’s league, with Russia’s FC Zenit and Germany’s Eintracht Frankfurt replacing AS Roma and West Ham United.

Image: Ayman.antar7CC BY-SA 4.0/ Edited for size