A heavy blow: global football to lose €12 billion

The Covid-19 disease continues to affect daily life around the world, and sports are no exception. As early as spring, sports clubs were warning of massive losses due to canceled competitions and closed stadiums. The only question was how large the final deficit would be. According to FIFA's latest analysis, even the world's most popular sport is facing difficult times. Global football is projected to lose a staggering €12 billion. "This is a significant figure that includes the entire football economy, including youth academies. The impact will continue into the next calendar year," said Olli Rehn, head of FIFA’s steering committee dealing with club compensation issues related to the pandemic.

Empty stadiums and corporate caution
What exactly caused the biggest losses for football clubs? Sports analyst and football agent Jozef Tokos divided the revenue shortfalls into two categories: immediate and medium-term.

"Immediate impacts were seen in lost matchday revenue, which for example in Germany makes up a significant portion of total income," Tokos told Economic Daily. He described medium-term losses as stemming from decreased investment from the commercial sector. "Companies are more cautious and conservative when it comes to linking their brand with football-related products," he added.

Broadcast deals at the heart of disputes
Tokos also pointed out that it would be helpful to understand the methodology used to arrive at the final €12 billion figure. In any case, by spring, league governing bodies in several countries were already dealing with a key issue—how to settle with broadcasters after the season was canceled. In practice, many leagues failed to deliver the agreed number of rounds or matches.

In countries like France and Belgium, the 2019/2020 season was officially canceled, and broadcasters demanded financial compensation. The most lucrative broadcast deals have long been held by the English Premier League, which benefits from long-term contracts with TV partners. Additionally, the league was eventually completed under a revised schedule.

No misuse of funds
As the world continues to wait for an effective coronavirus vaccine and the pandemic is far from over, spectator restrictions are expected to remain in place at least until the middle of the current season. In response, FIFA prepared a special €1.3 billion Covid relief package for all 211 of its member associations. These funds are meant to immediately cover damages, and FIFA has stated it will strictly monitor how the money is used—unlike in the past, where financial mismanagement was common, particularly in some African and South American federations.

"Some federations complained about the complex and lengthy bureaucracy involved. However, it is essential that the funds are used for the correct purposes," commented Olli Rehn. One of the latest examples of proper fund usage comes from Thailand, where grants were used to cover mandatory Covid testing for league teams and to implement video assistant referee (VAR) technology. Given the ongoing uncertainty and difficulty the virus is causing for the football industry, FIFA also decided to support member associations by offering interest-free loans of up to €4.2 million. This aims to prevent the gap between wealthy and poorer clubs or associations from widening even further. (...)