The impact of a relegation

NPO Radio 1, Geld of je Leven
Thomas Peeters
Erasmus School of Economics

PEC Zwolle recently relegated from the Eredivisie. What does this mean financially for such a club? Thomas Peeters, sports economist at Erasmus School of Economics, is a guest in the programme Money or Your Life to answer this question.

PEC Zwolle has to make budget cuts of four to five million euros, on a total current budget of twelve million euros: a tough job. Peeters indicates that such a loss is realistic and can also be seen in similar cases in the past, such as Roda JC. A salient detail: Rob Westerhof, former chairman of Sparta Rotterdam, mentions that the football clubs in the left-hand tier of the Eredivisie are ranked on the size of their budgets.

Different income sources

Peeters notes that when a club is relegated, it loses its most interesting matches and this has an impact on the stadium revenue. Part of the media revenue from the Eredivisie is also lost and this will have a multi-year effect. The fact is that media revenues are distributed based on a club's past performance, explains Peeters. The same applies to TV money, where a year at a lower level is considered a very poor performance. These effects are only slowly phasing out.

Differences between relegated clubs

Peeters is asked whether it also matters what kind of club is relegated. The reasoning behind the question is as follows: some clubs always get relegated and may be more prepared for it in that sense, while FC Twente's relegation as a bigger club hit hard. Peeters agrees that this is an important point. Player contracts are still reasonably flexible: the term is often relatively short and sometimes even clauses are used in contracts that cancel the contract in the event of relegation. However, larger stadiums require maintenance and employees in the back office generally do not want to be let go immediately.

Associate professor
Thomas Peeters, sports economist
More information

You can listen to the broadcast of NPO Radio 1, 12 May 2022, here.

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