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ECA predicts €4bn Covid-related revenue hit for European clubs

Cristiano Ronaldo kicks the ball during the Serie A match between AC Milan and Juventus (Photo by MIGUEL MEDINA/AFP via Getty Images)

The European Club Association (ECA) has forecast that football clubs on the continent can expect to lose up to €4bn ($4.5bn) in revenue over the next year due to Covid-19.

The ECA has conducted an analysis on the financial footprint of the pandemic on European clubs and although seven of the 10 leagues in its sample have resumed their 2019-20 campaigns, the impact is set to be significant. The ECA is predicting that €1.5bn in revenue will be lost during the 2019-20 season, with €2.1bn to be lost during the 2020-21 campaign.

The body’s report states that, without Covid-19, club revenue excluding player transfers would stand at €19.6bn during the 2019-20 season, compared to €18.1bn with the effects of the virus taken into account. For the 2020-21 season, the drop-off is even larger, with a projected €20.5bn in revenue without Covid-19 and €18.4bn with the virus.

It is estimated that the total shortfall over the next two seasons will amount to €4bn in terms of lost revenues and €3.1bn in terms of Ebitda (earnings before interest, taxes, depreciation and amortisation).

With the top European leagues currently being forced to play fixtures behind closed doors, matchday income is the revenue stream that will be impacted the most. The ECA’s sample shows that there will be a 14-per-cent drop-off in gate receipts (from €2.9bn to €2.5bn) in 2019-20, and a 38.5-per-cent drop-off (from €3bn to €1.9bn) in 2020-21.

The report also calculates that 70.1 per cent of clubs’ income will be used to cover wages. The 10-league sample forecasts that the wage-to-revenue ratio (excluding net gains from player transfers) could increase from 59.6 per cent in 2018-19 to a projected 70.1 per cent in 2020-21. The ratio is estimated to have been just 62.9 per cent without Covid-19.

Charlie Marshall, chief executive of the ECA, said: “Clubs and those that represent them must continue to develop mitigating measures (cost, regulatory) and to adapt them over time to maintain economic balance and ensure viability. Managing cost and cash will be key until revenues have stabilised once more.

“The upcoming transfer market will give us the next indication of economic motivation and the state of football’s health, but time should also be taken now to examine more fundamental operating cost structures – for example, costs of enterprise, people, systems and technologies, stadium. Cost-cutting is always a delicate exercise – care is needed to avoid long-term reversal of many aspects of professionalisation that have been built up in football clubs over the past decade or more.”