The priority aim remains for the campaign - which is now on hold indefinitely - to be completed when it is safe to do so. But if cancellation is the only option and becomes unavoidable it could be financially devastating for clubs, particularly those outside the elite.
Premier League chief executive Richard Masters warned this week that the league as a whole faces losing £1bn, as well as further losses in the foreseeable future depending on the longer-term reach and impact of the pandemic.
Worst-Case Scenario Figures
A lot is relative. The biggest clubs who usually earn the most stand to miss out on the most.
It is estimated that Manchester United could miss out on £116m, with Manchester City and Liverpool also potentially losing out on over £100m each in lost revenue.
Chelsea could be without £91m in revenue, Tottenham without £83m and Arsenal without £75m.
All six would have normally expected to earn in excess of £40m each from broadcasting revenue alone in the remaining two months of the season. For Manchester City and Liverpool, that figure is north of £50m. All six would expect matchday revenue to exceed £10m, which could be lost, while Manchester United, in particular, are at risk of losing over £50m in commercial revenue.
Manchester City could lose nearly £42m in commercial revenue, while for Liverpool and Chelsea, commercial income for the final months of the season would be over £30m.
While the big clubs enjoy a fairly even split between the three main revenue streams, the rest are much more dependent on TV money.
Sheffield United, for example, stand to lose nearly £40m in broadcast revenue if the season is cancelled, compared to only minimal losses £1.6m and £1.5m in matchday and commercial income, which account for much less of their income.
It is a similar pattern for most of the rest of the league and £41.9m in lost revenue overall could be more damaging for Sheffield United than £116.4m for Manchester United
Estimated Lost Revenue by Club if 2019/20 Season is Cancelled:
|Club||Broadcast||Matchday||Commercial||Total Lost Revenue|
What is alarming is the state of many Premier League clubs’ finances. Research from The Athletic shows that only eight of the 18 teams whose account for 2018/19 have been published were profitable that season. The other 10 all made a loss, while the remaining two – Newcastle and Crystal Palace – made a loss in 2017/18, the most recently available accounts.
The biggest losses in 2018/19 were incurred by Chelsea and Everton, both in excess of £100m.
𝘕𝘰𝘯𝘦 𝘰𝘧 𝘶𝘴 𝘤𝘢𝘯 𝘱𝘭𝘢𝘺 𝘧𝘰𝘰𝘵𝘣𝘢𝘭𝘭 𝘳𝘪𝘨𝘩𝘵 𝘯𝘰𝘸. 𝘜𝘯𝘵𝘪𝘭 𝘸𝘦 𝘤𝘢𝘯, 𝘐'𝘮 𝘱𝘭𝘢𝘺𝘪𝘯𝘨 𝘧𝘰𝘳 𝘵𝘩𝘦 𝘕𝘏𝘚.— 90min (@90min_Football) April 8, 2020
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Wages to Revenue
As a general rule, the bigger the club, the lower the proportion of revenue spent on wages. Tottenham, for example, spent only 39% of their 2018/19 revenue on player renumeration, while for Manchester United, despite one of the largest wages bills in the world, it was 54%.
These clubs will be better able to cope with lost revenue, but others may struggle to keep on top of finances if income is temporarily curtailed. Last season, Bournemouth, Everton, Leicester, Southampton, Brighton and West Ham all spent more than 70% of their income on wages alone, as did Crystal Palace in 2017/18. For Bournemouth and Everton, it was as high as 85%.
Everton turned over £188m last season, and the potential to miss out on more than £40m in lost revenue this season when the majority of their turnover already goes on wages could be disastrous – bear in mind the Toffees made a £107m loss last season without the impact of global crisis.
It is likely a reason why clubs last week supported a motion to consult with players over a pay cut or wage deferral over a 12-month period of up to 30%.
It may have also contributed as a reason why some have opted to make use of the government’s Job Retention Scheme to cut the costs of paying non-playing staff, although the furious backlash in response to Liverpool’s furlough decision is rumoured to have put others off going down the same path.
Source : 90min