In these times we said goodbye not only to our usual social life but also to sport competitions. We also have to keep in mind that sport means more than just emotion and adrenaline: money and jobs. The pandemic could have destroyed 300.000 jobs and could cause losses between 16 and 20 billion euro.
The European Football Championship will begin in two days…since last year. And if we talk about the business called “football”, the competition starts with 1,5 billion euro worth of losses as a result of delaying the matches by 1 year.
Of course, Romania will not be playing in the European Championship but has an asset: it will be hosting 4 matches, 3 in the group phase and one in the round of 16. That would mean that the supporters, Romanian or foreign, would bring approximately 45 million euro to the Capital’s economy, especially Horeca. But as a classic in the Romanian business landscape would say, that is cigar money. Well, if we don’t think about the fact that we have organization costs of over 180 million euro. And the financial recipe of the European Championship exceeds 1,7 billion euro, including broadcasting rights.
Obviously, as far as stadiums are concerned, the amortisation is made in time. But that requires having other activities there than one match a week. Or other sport competitions. Hard to believe, but none of the three stadiums have, for example, an athletics track. None of them is multidisciplinary.
THE RECIPE TO A FINANCIAL DISASTER?
- Stadium costs: 177 mil. euro
- Organization costs: 6 mil. euro
- Income: 45 mil. euro
The pandemic could destroy any trace of sport industry, be it football or other sports. Last year in spring there was a discussion about delaying all sports competitions by 6 months. Had that happened, the damage would have been huge: losses between 16 and 20 billion euro and 300.000 jobs lost. Fortunately, it did not.
Football, the most prolific sport from a financial point of view, had, and has, the most to lose. The European football market means 26 billion euro. More than a quarter of it, almost 7 billion euro and 100.000 jobs, only in Premiere League. 2 months of inactivity in European football, but also the lack of spectators, summed last year, on a club level, losses of 2 billion euro, according to Deloitte, the company that audits this industry every year. The financial report is suggestively called “Money League”.
“FOOTBALL” INDUSTRY (EUROPE)
- 26 billion euro – income in 2019
- 25% generated by Premiere League
- Losses caused by the pandemic (2020): 2 billion euro
Source: Deloitte
If we look at the analysis of the European forum, the losses are even bigger. They are talking about 3 billion euro only in UEFA. The sum is the result of delaying or cancelling certain competitions. Also, according to UEFA, as far as European top clubs are concerned, they estimated losses of 1,2 billion euro from broadcasting rights and 2,4 billion euro from sponsorship and commercial agreements.
“GOALS” IN UEFA FINANCES
- Delaying or cancelling competitions: -3 billion euro
- Broadcasting rights: -1,2 billion euro
- Sponsorship and commercial agreements: -2,4 billon euro
Source: UEFA
Of course, sports competitions don’t mean only football. Tennis, handball, volleyball, athletics and many others also mean billions of euro worth of losses, that are hard to estimate now. However, only if we talked about delaying the Olympic Games in Tokyo we would talk about losses of 6 billion euro. And I haven’t mentioned the horizontal industry: maintenance and utilities, sports equipment, bets, etc. Maybe in these times European governments should reflect more upon sports. In a professional manner.
(an article by Edward Pastia)