Premier League clubs will be desperate to avoid being hit with a ‘double whammy’ financial crisis during the coronavirus outbreak, and will hope to play postponed games as opposed to cancelling them,
Solutions to finish off the 2019/20 season are being evaluated by the FA, Premier League and Football League as football attempts to come to terms with the ravishing impact of COVID-19.
Owen Good, an economist at CEBR, has spoken on the complex situation football clubs currently find themselves in and what the worst case scenario would be for the ‘Manchester Uniteds’ of the world.
He said: “One crucial aspect is whether TV deals have force majeure clauses that allow for the companies that have the TV rights to demand a refund if the games don’t go ahead.
“On top of lost matchday revenue, if that double whammy were to occur, it would be especially damaging for Premier League clubs and those in the Champions League and Europa League. That may be where your Man Utds of the world get hit the hardest.
“Obviously the financial implications depend on how long this lasts. If we end up with something like a two-month delay with the Euros pushed back a summer and the various domestic competitions allowed to finish through the early summer, then the impacts will likely be somewhat mitigated for the bigger clubs.”
Of course, it’s not only the biggest clubs in the UK who would suffer in the event of total cancellation.
All sides playing between Steps 3 and 6 in the non-league pyramid have been told their season has been declared void and expunged from history, but decisions are on-hold with regards to the Premier League, Football League (Championship, L1 and L2) and the National League.
Good predicts that while clubs in the bigger leagues are relatively safeguarded, smaller sides will face enormous pressure in the coming weeks.
He continued: “Under this scenario I suspect smaller clubs would suffer significantly more.
“Those that rely on a larger percentage of revenue from ticket sales that come week-to-week, and thus don’t have the buffer of a longer-term TV rights deal may suffer cash flow issues and struggle to pay staff.
“In many ways the impacts will resemble that of other industries that are shutting down such as tourism and creative industries, where this essentially represents a stress test.
“This most damaging to those in the worst underlying financial position pre-crisis.
“Assessing the impact on sport if these measures go on significantly longer is far harder, because then the question becomes one of cancelling fixtures and events, as opposed to solely postponements. Clearly that would have a far more significant impact.”
The message is loud and clear from a financial perspective. So long as games are postponed there is an opportunity to balance the downturn when play resumes.
However, if the postponements turn to outright cancellations, it could be a devastating time for English football with numerous clubs in peril.