08/05/2020 by Peter Halpin 0 Comments
Watched League in the World is not immune!
With talk in recent days of horrific ongoings at Waterford FC in our own League of Ireland, whereby all players and management were informed via email that they were being temporarily laid-off , it must be highlighted that even the most watched League in the World is not immune to the current pandemic that is Coronavirus (Covid-19).
What impact could a full 2020-21 Premier League season without fans have on clubs' finances?
With matches likely to be played behind closed doors for an extended period because of bans on mass gatherings amid the coronavirus pandemic, no fans means no matchday revenue.
Increasingly lucrative broadcasting deals (something we don’t have in our own League of Ireland ) and commercial opportunities mean matchday income contributes a smaller proportion of total revenue to clubs in the modern era than before - but it can still have a significant impact.
And it is the bigger teams who stand to lose more.
Who makes the most from matchdays?
Manchester United, whose Old Trafford stadium has the highest capacity and average attendance in the Premier League, generated over £4m per match in 2018-19.
There were eight teams in total making over £1m per home fixture during the season.
How important is matchday income? In the Premier League's first season in 1992-93, matchday income generated £89m (43%) out of a total of £205m. The matchday share is now only 13%, although the absolute figure has increased to £677m.
However, within those totals there is a range of income from matchday fans. This is because of a combination of stadium capacity differences, participation in domestic and European cup competitions and some clubs having more lucrative corporate hospitality.
Arsenal generated nearly a quarter of their total income from matchday last season, which makes them vulnerable financially to an extended period without matches taking place.
And who has money in the bank?
Arsenal had the second highest cash reserves last summer but much of that will have been spent since.
Matchday income and wages.
Fans often claim they pay players' wages. While this is true when taking into consideration the global broadcasting deals paid for by fan subscriptions, matchday income represents 22% of the total wage bill.
Again, there is a wide variation in terms of the contribution made by fans of individual clubs.
The fans of Arsenal and Tottenham, both with 60,000-plus capacity stadia and significant corporate and football tourist matchday income, contribute over 40p in every £1 of wages.
At the other end of the scale there were seven clubs whose fans' matchday contributions made up 10p or less per £1 of wages.
The Premier League total wage bill for 2018-19 was just over £3bn and wages have increased by 2,811% since 1992-3, compared to a rise in general inflation during the same period of 108%.
If there is a shutdown for a full season then clubs' wage bills will fall as there will be fewer matchday staff required in areas such as catering, security and stewarding. These costs, however, make up a relatively low element of the overall wage cost.
Manchester United, for example, employed 3,340 staff on matchdays at Old Trafford. Assuming they are on the UK’s national living wage and working a six-hour shift, this works out at less than £5m over a year - United's total wage bill in 2018-19 was £332m.
Profits and losses.
Premier League clubs made a collective loss of £384m in 2018-19.
This was underwritten by a combination of player sales and owner handouts. With the transfer market expected to collapse as a result of Covid-19 and many owners facing significant falls in their wealth, then some clubs could face challenging times ahead, as will of course many other businesses.
If the Premier League is unable to replace the £677m matchday revenue during a season-long lockdown, then there will presumably be more clubs who need to negotiate wage reductions with players or face the possibility of going out of business.
Premier League football, not dissimilar to League of Ireland is not immune from the virus. ⚽