Why football clubs can survive corona without government support

Erasmus School of Economics

According to Thomas Peeters, sports economist at Erasmus School of Economics, the government should support smaller sports such as volleyball and hockey instead of the big football clubs. Football clubs can survive corona if they adjust their expenditures to their income. In an interview with Belgian newspaper Het Laatste Nieuws, Peeters explains why football clubs have little reason to ask for government aid.

Under pressure

It is clear to Peeters that the sports world is in need. ‘The first division football clubs had an annual turnover of 391 million euros two years ago, according to Uefa. 22% or 86 million euros came from tickets. That, together with commercial revenues that have stopped bringing in money, corona evaporates one third of the total revenue. The only sources of revenue come from TV money and the premiums for European football. It is also possible that transfer fees, another important source of income, will come under pressure as well.’

Strength or weakness?

So what now? Peeters mentions that he is not a virologist, but that he believes that the current measures will have a big impact on football as long as there is no vaccine. ‘There are only few sectors that employ 100,000 people a week like football. In normal times that could be considered a strength, but now it can be considered a weakness.’ Peeters also explains that restructuring football clubs is not as easily said than done. Many clubs have the same business model: smaller deficits a number of years in a row, after which they make up for this in a successful year with valuable transfers.’

Not in the public interest

In addition, 70% of the clubs' turnover goes to the salaries of the players. However, selling players in the short term is not an option. One solution would be to deal with the situation the way FC Barcelona did: here they let the players hand in some of their wages against the guarantee that they will receive more wages after the corona crisis. In any case, Peeters does not think that it is in the public interest to provide government aid to ailing football clubs.

A reason to ask for government aid

According to Peeters, volleyball, basketball or hockey clubs are clubs that do have a reason to ask the government for help. If football clubs were to adjust their expenditure to their income, they could easily survive corona. ‘The income from TV, which is around 100 million euros a year, is not in jeopardy. Furthermore, ten years ago, our professional clubs were fine with only half of their current income. So they have already proved that they can do it.’ Many other sports do not have income from TV money to fall back on. ‘If the public stays away, the box office remains empty, because there is no transfer system. There is not much margin, because pros in these sports do not have such generous wages.’

Professor

Thomas Peeters, sports economist

More information

The full article from Het Laatste Nieuws, 29 October 2020, can be downloaded above (in Dutch). 

You can read the interview with Sporza, 29 October 2020, here (in Dutch).

Want to know more about the effects of corona in sports? Listen to the podcast of De Tribune, 3 November 2020, here (in Dutch). 

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