This is how the Corona affected the European football champions

To what extent do big football clubs live the moment and fail to change habits even in a time of historic epidemic? A comprehensive report by the consulting and accounting firm KPMG, which reviews the financial conduct of eight European teams that won the championship last season, shows that the vast majority did nothing substantial and incurred heavy financial losses in the 2020/21 season. This is despite the fact that the corona had already hit them many months before.

With the exception of two football teams, German champions Bayern Munich and English champions Manchester City, all six other teams that won the championship that season – Atletico Madrid, Inter, Ajax, Lille, Sporting Lisbon and Shiktash – recorded financial losses. Some of the losses were very heavy and will even affect them in the coming seasons.

Did everything to win, and paid dearly

European football clubs met the Corona plague in March 2020. Games were canceled, those that took place were played without an audience, and broadcasting franchises reduced payments and immediately hit circulation. The response of the groups was then mainly expressed in wage cuts, in order to balance the numbers as much as possible, and in running wherever it was possible to give a loan.

Half a year has passed, a new season has opened, but no drastic change has been made in the clubs. As a result, the eight champions reviewed in the report ended the season with a total financial loss of 461 million euros.

Two teams did their best to win the championship that season and paid dearly for it in the books – Italian Inter finished the season with a loss of 245 million euros, and Spanish Atletico Madrid finished with a minus of 112 million euros and intends to sell part of the club. Despite this, they were unable to record the “achievement” of Barcelona – the team from Catalonia finished the season with a deficit of 481 million euros and will lick the damage for many more years.

Acquire players and do not consider losses

Three classic revenue components make up the budget of football clubs, and sports teams in general – broadcasting rights, sponsorship agreements and revenue from ticket sales and subscriptions (revenue from “game days”). Although the plague was already a fact, the report shows that the groups’ main problem was building a budget that did not take into account one major section that the plague struck – the audience.

The strict regulation on bringing an audience to the pitches entailed an entire season played behind closed doors, and the eight teams that won the championship together brought in that season 25 million euros from “playing days”. In the regular season, the amount was supposed to be about 300 million euros.

Manchester City, for whom every game with fans at the home stadium is worth more than three million euros, entered last season 0.8 million euros from fans. Atletico Madrid, who recently built a new stadium that is supposed to bring in about 2.5 million euros every game, has a little over four million euros in the entire season.

For some teams it was drastic – in France the restrictions on crowds were extremely severe, and champion Lille finished the season with an income of only 200,000 euros from crowds.
The groups’ solution to the situation amounted in most cases to temporary wage cuts. And yet, almost all of them failed to get rid of player acquisitions and continued to operate in this sector as if the pandemic had never occurred. Five teams acquired players on a larger scale than the amount they sold. For example, Manchester City ended its procurement activities in the 2020/21 season with a deficit of about 100 million euros.

One of the reasons for the increased activity in the transfer market during the corona season is the removal of UEFA’s regulation on break-even restrictions.

Team owners with deep pockets, such as Manchester City which is held by members of the royal family from Abu Dhabi, took advantage of the situation to arm themselves for years to come. The market was full of reality, teams sold players at floor prices, and the big teams went on a shopping spree.

Also economically, in the end the Germans win

Amid all the losses, two clubs need a different approach. The first is Manchester City, who managed to finish the pandemic season with a profit of about 3 million euros.

Bayern Munich is a completely different story. The Bavarian club finished the toughest season European football has experienced with a profit of 1.8 million euros, closing the 29th consecutive season in profit. Although the home “Allianz Arena” saw almost no crowd for the entire season, and despite the team embarking on a buying spree, Bayern lost only 9% of the turnover, compared to its peak season recorded in the pre-Corona season. How does it work out? Bayern’s financial strength is mainly based on sponsorship agreements – an area that was not harmed during the epidemic, and is also responsible in the normal season for about 60% of its turnover.

The strength of Bayern Munich can also be seen in the coming seasons. When big teams have to calculate every euro to close the debts – Bayern will be able to continue to deal as if there had never been an epidemic.

Its situation in relation to other clubs is even better, given that the team is without debts at all and after having already made the biggest infrastructure investment in the life of a football club – building a stadium. By the way stadium, also the 25-year loan that Bayern took during its construction it finished repaying 16 years before the planning.

By Editor

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