Economic crisis begins to bite in European football

Many clubs lack sufficient reserves to get them through sustained period without revenue

LONDON: Europe may be the financial powerhouse of global football, but the economic impact from the coronavirus pandemic is already beginning to hit and the consequences could be disastrous for clubs across the continent.

When players at Bayern Munich, one of the world's richest clubs, have reportedly agreed to take pay cuts, it is not difficult to imagine the troubles in store for the sport as a whole.

Many clubs lack sufficient cash reserves to get them through a sustained period without revenue coming in. For example in Scotland, where clubs rely heavily on gate receipts, the situation is "clearly unsustainable".

That is the view of Aberdeen chairman Dave Cormack, who forecasts facing five million pounds of costs without any money coming in over the next few months.

"No club, whatever their size, scale or level of investment, can withstand a total lack of income over a period of anything between three to six months," Cormack said.

Even the German league (DFL) -- which runs the Bundesliga and has annual turnover of more than four billion euros ($4.3 billion) -- fears a catastrophe.

"If we don't play games behind closed doors as soon as possible, there is no point wondering if we should have a league of 18 or 20 teams," said DFL chief executive Christian Seifert. "We won't even have 20 professional clubs anymore."

Eye-watering losses

It is almost two weeks since leading leagues across Europe stopped. No matches mean no money from gate receipts and before long payments from broadcasters may stop too.

The sums set to be lost everywhere are eye-watering.

In England, according to reports, the Premier League faces losing 762 million pounds from domestic broadcast deals with Sky Sports and BT Sport.

Analysis by accounting firm KPMG suggests cancelling the rest of the season would cost the 'Big Five' leagues of England, Spain, Germany, Italy and France a combined total of over four billion euros.

It is therefore not difficult to see why leagues will consider restarting behind closed doors, to at least guarantee revenue from broadcasters.

After all, clubs must continue during the pandemic to pay hefty player salaries.

In France, several clubs, including Marseille and Lyon, have put their players on partial unemployment to save money.

It means clubs pay staff 70 per cent of their salaries. The state pays the rest, albeit limited to 4,850 euros per employee, a drop in the ocean for most footballers.

In Germany, players at Borussia Moenchengladbach were the first in the Bundesliga to propose pay cuts, followed by others at Werder Bremen, Schalke and Borussia Dortmund. Bild reported that Bayern players accepted a 20 per cent pay cut.