Saturday, January 23, 2021

Liverpool expected to lose £42m after Man United and Spurs financial blow

Football is loved and admired all around the globe and that is why it is driven by emotions most of the time. But, what people generally forget is that it is a very important business for many people. It is a business in which many people have invested and are waiting to reap the returns. 

Just like any other business, the Covid-19 pandemic has caused huge disruptions in the world of football. With the shutdown of games for a few months and no or limited crowd being allowed, clubs are finding it very hard to generate revenues and convert that into profits.

After every three months or a year, teams that are listed on the stock markets have to tell shareholders their financial performance. This financial report contains how much a club has earned and through which mediums. Thus, we get a complete idea of how a club has performed financially.

According to the reports, 19 biggest European football clubs have published their financial reports for 2019-20. Out of these 19 clubs, only 3 have registered profits. Rest all of the clubs have incurred losses last year.

A look at the club’s financial performance

Liverpool expected to lose £42m after Man United and Spurs financial blow

The Italian club, AS Roma, suffered the most as they recorded a loss of €204m or £185m. The major reason behind this shambolic performance is the negative impacts due to the lockdown and their failure to qualify for Champions League. 

Another Italian club, AC Milan, reported a loss of €195m or £177m. They were followed by Everton on the third spot as the Merseyside club declared losses of £139.9m due to Covid-19 and huge investments made in the recent transfer windows.

Tottenham Hotspur built a massive new stadium but only with the aid of a huge debt worth £1 billion. Pandemic wasn’t nice to them either as the club reported a loss of €70m or £63.9m.

One of the most prominent clubs in the world, Manchester United, announced grim financial results. Their revenues fell by 19% to £509m which caused the profits to shrink into losses worth £23.2m. This occurred mainly due to a mighty drop in broadcasting revenue. It was down by £101.0 million or 41.9% as compared to the previous year. 

This shows that not only the small clubs but even the bigger clubs have suffered a huge financial setback due to Covid-19. Liverpool won the Premier League last year after three decades. Yet, the market analyst believes that we might see a drop in their numbers too.

They expect Liverpool’s revenue to register a dip of 8%. The higher cost incurred due to safety and sanitization drives by the club might push them to record annual losses even after winning the league title. That’s how grave the situation has been for clubs all over Europe.

Liverpool expected to lose £42m after Man United and Spurs financial blow

What can we expect now?

The financial pain seen this year will surely have an impact on the coming transfer window and contract extensions. The infection rates and deaths rise are on a rise again in many European countries. That means, the national governments will refrain the clubs from allowing crowds in the stadiums. 

If this deadlock continues, we will see clubs taking a step back from their lavishing transfer plans. Expensive or mega-money deals would be very rare. In recent years, agent’s fees have also increased massively. Thus, the total cost of a transfer might be too much for the clubs to bear. Few clubs like Real Madrid and Barcelona have introduced wage cuts to decrease their cost whereas some other clubs have laid-off a few members of the staff. We hope that the world gets out of this misery very soon so that we can get our ‘normal’ back.

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