The wide-ranging effects of the Covid-19 crisis on European football will threaten the existence of some clubs and force transfer fees down, according to Stephan Herth, senior vice-president of football at the Infront agency.
Herth, who is to step down from his position this summer after 17 years at the Zug-based agency, has forecast a bleak future for many clubs but believes that football can emerge stronger in the long run.
Speaking to Switzerland’s Neue Zürcher Zeitung as professional football remains on hold due to the coronavirus outbreak, he said: “There will be clubs that have existential problems. It all depends on how solidly they have managed their business up until now and how much equity they have built.
“How much do they have in reserve? If club management has not planned enough for the future, things will get tight.
“Smaller leagues like the Super League in Switzerland are hit particularly hard by the crisis, even with sound management. They will now have to do a very good job of avoiding financial imbalance. Some will fall into trouble.”
The Swiss Super League generates just over CHF30m (€27.8m/$30.2m) per year from its domestic media-rights deal with pay-television broadcaster Teleclub from 2017-18 to 2020-21. That agreement also covers rights to the second-tier Challenge League and is dwarfed by the size of other European leagues’ rights deals, thus heightening the impact felt by clubs currently missing out on valuable ticketing revenues.
Transfer fees will “decrease significantly” and salaries will also come under pressure, according to Herth, albeit the top stars will not feel the financial hit, he said.
He noted: “The correction will mainly be observed one level below, in the middle range of established professionals.”
On the financial disparity between clubs, he remarked: “The gap between rich and poor clubs will widen even further due to this crisis. One of the reasons for this is that smaller teams will soon be forced to make emergency sales of players in order to avoid financial difficulties. They have no choice but to stay on budget.”
Nevertheless, Herth has predicted that the sport can “emerge from the crisis stronger than before”.
He concluded: “Many will have learned a few important lessons, be better prepared for bad times and look at contracts more carefully. Correction is healthy for a system that has only grown for years.”