The COVID-19 pandemic has had a significant adverse impact on football clubs, though it is important to distinguish between money that has been completely lost to the game and income that has simply been deferred. This thread will analyse what this means for the Premier League.
Many clubs have listed the revenue impact of COVID-19 in their accounts, while others have not quantified the amounts. In the latter case, I have made assumptions consistent with those clubs who have provided figures in order to estimate the impact.
Furthermore, there were no fewer than 7 English clubs in the top 20 (5 in the top 10) of the Deloitte Money League, which is a global ranking of revenue. In fact, there were 13 clubs in the top 30 (including #NUFC, who did not share figures with the consultancy).
Excluding those 3 promoted clubs, revenue for the other 17 clubs dropped £641m (13%) from £4,773m to £4,132m, mainly due to broadcasting, down £683m (25%) to £2,045m, though match day also fell £95m (14%) to £563m. Partly offset by commercial growing £138m (10%) to £1,520m.
However, the larger impact on broadcasting income was the deferral of £383m to 2020/21 accounts, as revenue for games played after a club’s accounting close could not be booked in the 2019/20 season. However, clubs have different accounting dates, so the impact was not the same.
This makes revenue comparisons between Premier League clubs quite tricky, as the figures for clubs with 31st July year-end looked better in 2019/20, while others saw reductions. On the other hand, it will be a different story in 2020/21, when those clubs will see a boost.
In addition, clubs that qualified for Europe had a reduction in TV money. There was a rebate of around 3% to broadcasters, while revenue for games played after the accounting close was deferred to 2020/21. In this way #MCFC had a £3m rebate with £9m revenue slipped to 2020/21.
There was little COVID impact on commercial income in 2019/20, thanks to existing contractual arrangements, only amounting to £6m lost and £13m deferred. The effect is likely to have been much higher in the 2020/21 season, as sponsors also struggled in the pandemic.
If we add back the COVID impact, the 2019/20 revenue would increase £736m from £4,507m to £5,243m. Excluding the 3 promoted clubs, it would increase by £666m from £4,132m to £4,798m with 10 of the 17 clubs having year-on-year revenue growth.
Excluding COVID, 2019/20 revenue would have grown £25m (1%) from £4,773m to £4,798m. Both commercial and match day rose, by £157m (11%) and £40m (6%) respectively, though broadcasting was down £171m (6%).
Of course, the COVID impact will have been much larger in 2020/21, as almost all games were played without fans. I have estimated £1,049m: (a) match day £698m (95% loss); (b) Premier League rebate £97m (media reports); (c) Europe TV £14m (rebate); commercial £240m (15% decrease).
Based on these assumptions, Premier League clubs will have lost £1.4 bln over past 2 seasons (2019/20 £326m, 2020/21 £1,049m), split between match day £844m, broadcasting £284m & commercial £246m. Excludes £410m revenue deferred from 2019/20, as this is only a timing difference.
There is no doubt that COVID has had a major negative impact on revenue, though accounting technicalities (i.e. different year-ends) mean that clubs were affected to a greater or lesser extent in 2019/20 figures. In many cases, deferred revenue will enhance 2020/21 financials.
That said, the size of the PL losses really should give pause for thought, so I’ll say it again: £1.4 bln over the past two seasons. In that period, 6 clubs have lost more than £120m, Although losses are smaller outside the Big Six, they are still significant in percentage terms.
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