Experts Predict Bankruptcy Of Many Football Clubs In Europe

Analysts watching the evolving economic impact of the novel coronavirus pandemic and the sports world say that bankruptcy could hit many football clubs around the world.

The pandemic has resulted in significant loss to commercial revenue for clubs all across Europe because there are no games in almost all of the countries since the last two months at least and analysts predict that even if matches are resumed in some countries, stadiums are most likely stay empty for months to come because of the necessity for social distancing.

Lokomotiva Zagreb director Dennis Gudasic said that the causes for concerns included a slowdown in the multi-billion-dollar transfer market as well as possible defaulting on payments from player deals made before the shutdown.

“I think the biggest threat to club football in the coming six months is going to be the survival of smaller clubs,” Gudasic said during an online debate hosted on Wednesday by the International Centre for Sports Studies (CIES) at the University of Neuchatel in Switzerland.

If the challenges facing smaller clubs are not understood, there can be a “drastic situation whereby we have maybe 100 or 200 clubs go bankrupt in September or October” he warned.

Currently many of the well known football clubs are seeking to participate in richer leagues so that they can complete their seasons and be able to revive the transfer market by fulfilling the contracts against money paid by broadcasters to the clubs.

“This is where there is a lot of uncertainty,” Gudasic said. He added hat some clubs in Croatia had become “actually addicted” to transfer revenue from their former players in terms of budgeting.

Some degree of flexibility will be shown by FIFA, football’s world governing body, for what is typically the trading period in Europe in July to August, since there is no definitive clue about when there can be a resumption of the current season so that it can be ended and the beginning of the 2020-21 campaign.

“This would be a good idea to make like a six months transfer window from summer to winter 2021,” Sadowski said. “It would give all those clubs a chance to better plan transfers and their budgets.”

Analysts also highlighted the huge wealth gap in Europe even though football clubs in countries like English also face hardship if broadcast deals are not paid in full. Gudasic said that this season, every English Premier League club will still be paid tens of millions of dollars compared to clubs in Croatia that will get only about 150,000 euros or $162,000 annually from domestic TV revenue.

Football clubs faced “an existential threat”, predicted European Club Association (ECA) leader Andrea Agnelli in March.

And the Juventus president has described the coronavirus outbreak as “the biggest challenge our game and industry has ever faced”.

(Adapted from AlJazeera.com)



Categories: Economy & Finance, Regulations & Legal, Strategy, Sustainability, Uncategorized

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