Premier League clubs are facing a staggering collective loss of over £1billion in revenue for the 2019-20 season as a result of the coronavirus pandemic, financial firm Deloitte has predicted.
In the 2018-19 season, the 20 top-flight teams in England generated over £5bn for the first time, but the suspension of this campaign due to the global health crisis is set to hit teams hard in the pocket.
Football in the Premier League has been on halt since March and is scheduled to return behind closed doors next week.
Deloitte have forecast teams are facing an accumulative, permanent loss of £500m as a result of rebates owed to broadcasters and loss of matchday revenue.
Dan Jones, the head of Deloitte’s sports business group, said: “We expect the ongoing COVID-19 pandemic to cause significant revenue reduction and operating losses across European football in the current season’s financial results.
“Clubs are having to weather multiple financial impacts, including rebates or deferrals of commercial and broadcast incomes, as well as the loss of matchday income and other event-related revenue.”
Deloitte predicted clubs will earn approximately half of what they normally would in matchday revenue in 2020-21, but that estimated figure of £350m is set to be lost entirely if supporters cannot return to stadiums.
“Exactly how that half comes to pass is open to a lot of speculation by a lot of people at the moment but it’s an estimate of where we think we might get to,” Jones said.
“That assumes some form of phased opening over time but hopefully by the end of next season being back to having full stadia again.
“Football returning – in a safe and sensible way – is clearly important to limiting the financial impact that the pandemic has had.
“For 18-19 for the full year we had £680m of Premier League matchday revenue. For 20-21 we have assumed £350m.
“So if you allow for a bit of inflation you’d be thinking £700m or thereabouts would have been the right number, so we have gone for £350m as an estimate.”
The report said Europe’s big five leagues of England, Spain, Italy, Germany and France generated a record £15bn in revenue.
It also said all three tiers of the English Football League achieved over £1bn in revenue for the first time.
However, Championship clubs lost a combined £300m and have a whopping players-wages-to-turnover ratio of 107 per cent as teams chase the Premier League dream.
Jones believes a salary cap should be enforced to help long-term survival.
“You’ve got 107 per cent of revenue going out on wages. You can see the problem looming,” he added.
“A salary cap is a blunt instrument, but if you can only spend 70 per cent of revenue on salary, and applied that in 2018-19, you take £300m out of the wage bill and wipe out the losses.”