Football has never faced anything like this before.
There is no protocol or procedure to follow with every major European league and competition suspended indefinitely due to the global coronavirus pandemic. It’s a crisis which has opened up numerous flaws in society and the systems that support our culture. Football, for all its arrogance and self-importance, is little more than a reflection of society and so it is no surprise that it, too, has had many flaws exposed.
There is not an area of the sport that is currently not under strain. Football’s entire ecosystem has been compromised to the point where the game will likely be changed forever by these unprecedented times. What comes out of the coronavirus crisis is almost certain to be very different from what entered it.
Andrea Agnelli, the Juventus chief who has become a polarising figure with his views on a potential European super league among other things, believes the transfer market will be dramatically altered, for starters. That the inflation of the last decade or so will be halted as clubs face revenue shortfalls. He has even proposed an NBA-style trade method to replace the current system.
The level of transfer market speculation and conjecture that still persists in spite of the current crisis suggests few have grasped just how dramatic the change to the sport will be. The kind of inflation that was truly accelerated through deals like Barcelona’s £142 million signing of Philippe Coutinho and Liverpool’s £75 million addition of Virgil Van Dijk will almost certainly come to an end as clubs scramble for reliable revenue streams.
“You can't dictate it, but transfer fees in excess of €100 million will be a thing of the past for the next few years,” claimed former Bayern Munich president Uli Hoeness recently. Any big transfers will be highly structured. It’s difficult to envisage a club any time soon paying £80 million in one go for a player as Manchester United did for Harry Maguire last summer.
‘Sustainability’ has been a buzzword in football for the best part of a decade yet the coronavirus pandemic has exposed the hollowness of any commitment to it. Even in the age of Financial Fair Play, clubs are as financially gung-ho as ever. That so many have sought support through the UK government’s furlough scheme is evidence of this.
You can't dictate it, but transfer fees in excess of €100 million will be a thing of the past for the next few yearsformer Bayern Munich president, Uli Hoeness
Of course, some clubs are widely suspected of using this scheme to their own financial gain. Liverpool, for one, announced pre-tax profits of £42 million as recently as February, recording increased revenue of £533 million for 2018/19.
Tottenham recorded pre-tax profits of £68 million for this year, handing chairman Daniel Levy a £3 million bonus for the completion of the club’s new stadium. It’s hard to believe that even in these challenging times neither club can afford to pay their non-playing staff more than 20%, topping up the other 80% through furlough.
There is a natural urge to argue that no Premier League club, given the wealth now at the top of the game, should require government support. But elite level football has a cash flow problem. Clubs spend money almost as soon as it comes in. With the coronavirus pandemic stemming the flow of income, a serious problem has arisen.
Almost half of all Premier League clubs recorded a wages-to-revenue ratio of 70% or greater for the 2018/19 season, according to Deloitte. Much is made of the Premier League’s multi-billion pound TV contract, but upon closer examination many clubs are operating on ice thin margins. The collective operating profitability for all Premier League clubs in 2018/19, for instance, stood at just £900 million. Spread across 20 clubs, that is not much of a cushion.
At Championship level, the outlook is even bleaker, with more than than half of all clubs spending more on wages than they make in income. It’s a similar story in Spain where there is a reversal of the situation in England, it’s Spain’s elite level clubs that appear to be facing the greatest challenge, with their reckless spending of recent times brutally exposed.
Atletico Madrid and Barcelona have both cut player wages by 70% largely because they had no choice. Atleti’s current net debt to profits (%), for instance, stands at an astonishing 103%. Barcelona’s is at 27% while Valencia’s is at 118% and Real Zaragoza’s in the Segunda Division is at an incredible 432%. Spanish football has spent the last decade or so inflating this bubble and the coronavirus pandemic could be the thing that bursts it.
In the past, TV has helped football out of any hole it dug for itself. Now, that is not so certain. It’s probable that the sport’s rights market will shift once the coronavirus pandemic has eased.
A shift was already underway as football faced up to the new reality of streaming and the opportunities that presents (see the Premier League’s deal with Amazon Prime Video which for the first time saw every single fixture from two gameweeks broadcast over the festive period), but with the guaranteed worth of live sport now in question there could be a reassessment in broadcasting circles. From that any outcome, positive or negative, is possible.
There are almost too many unknowns to consider all that once. It’s because of this that football leagues and governing bodies are struggling to point in the direction of the escape route from this nightmare scenario. What happens over the next few weeks and months could eventually liberate football just as much as it will challenge it, but right now all that matters is survival. The sport will be moulded in one way or another by this pandemic.