Coronavirus running Barça and Madrid club funds dry

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Coronavirus running Barça and Madrid club funds dry
Coronavirus running Barça and Madrid club funds dry

FC Barcelona has forecast that it will suffer a drop of about €154m in revenues this season, maybe as much as €260m, while Real Madrid says that they are close to losing €100m of income, even in the best case scenarios, although that figure could eventually reach €230m.

Major leagues will also be financially affected with a loss of revenue approaching €4bn and the losses are likely to continue into next year. LaLiga puts the cost of the coronavirus impact at €600 million.

A study by KPMG even highlights devaluation in the transfer prices of players of between 13 and 20%, although many people would agree that’s no bad thing.

According to a Deutsche Bank report, clubs could earn 30% less this current season with an even greater deficit, as much as 48%, next year.

Barça and Madrid, are the two most economically affected clubs in Spain. Without a vaccine, the clubs risk losing 48% of their turnover, which translates to 450 million for the Catalans and 400 million for Madrid.

Most of the numbers relate to this season, but losses from the pandemic would continue the following year. To be able to open the stadiums to the public, although with less capacity, the clubs would lose income of between 4% and 13% due to the lower sale of tickets. There would also be a decrease in advertising and sponsorship.

“The television rights would have to be renegotiated with a reduction of at least 20%, since the draw would not be as good if matches are played in empty stadiums; Ticketing revenues, which on average represent 15% of the turnover of the 20 major European clubs, would be completely lost, “says the report. Without a vaccine, clubs would see their income reduced by at least 27%.

Spain National team manager, Luis Enrique, was quoted last week as saying, “To play in an empty stadium is sadder than dancing with your sister.”

For Atlético de Madrid the report predicts a decrease in income this year of between 50 and 110 million euros, while the following season would be exposed to a reduction of between 10 and 155 million.

One of the most immediate consequences for football, according to The Football Observatory, will be a 28% decrease in the value of the transfer market, which will fall from 32.7 billion to 23.4 billion. In fact, a study by the consultant KPMG says that the transfer price of footballers has already been devalued since February by between 13% and 20%

Against this background, Deutsche Bank predicts that the clubs will have to take drastic measures: “They will have to find injections of capital from shareholders, loans or the cashing in of bonds, some will be forced to sell assets and make salary cuts for their staff.”

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