In the league football, it is not uncommon to see a huge amount of money being spent to bring players into the team and also to make them stay in the house via high salaries. But, these extravagances have also triggered the downfall of some much-fancied soccer clubs in the league circuit. Resultantly, several clubs, especially European, are finding themselves in the red due to their spendthrift ways. This apart, even the COVID-19 crisis has been instrumental in messing up the finances as UEFA had reported a staggering drop in the fortunes of certain top-notch European football clubs in both 2019-20 and 2020-21.
Reason For The Clubs’ Woes
The Covid pandemic has not spared any domain, the same can be said about sports as well. Some teams that were earning a lot due to ticket sales suffered a big jolt during the pandemic as crowds were either disallowed or restricted during most of the games. This has put several clubs under severe financial stress.
The Covid coupled with some awful transfer decisions of the past have hit clubs very hard in recent times. However, despite the heavily curtailed revenue streams, clubs have unfortunately not factored in the new reality while indulging in purchases. For example, PSG spent a lot on Kylian Mbappe (145 million) and Neymar (222 million) in the past and hence it did not come as a surprise when the Qatari-owned club declared a debt of 70 million by the end of 2020. However, not all clubs have fallen into the trap of mindless shopping.
Are There Any Profitable Clubs In Existence?
It is not as if all the clubs have been in financial woes. Some clubs have turned profitable, thanks to prudent spending on the part of owners. But the percentage of financially successful clubs has been very low, 1 percent to be precise. Chelsea, Liverpool, Newcastle and Norwich happen to be some of the few profitable clubs in the Premier League with Aston Villa and Burnley in break-even mode.
Also, thanks to European events like the Europa League and Champions League several sides have benefitted immensely. As per a website report, 32 clubs that progressed to the group stage of the Champions League got a share of the £2.44 billion out of the competition’s revenue. Clubs like Napoli and Villareal have earned profits as a result of this additional income as well.
How Can Clubs Earn More And Remain In Safe Zone?
There are several ways these sides can expand the cushion of their financial safety. For instance, substantial money can be created through European competitions like the Europa and Champions League, as the Champions League winner of last year, Chelsea, received a humongous 23.18 million pounds. Even, Man City, the runners up also got a good sum of £18.3 million.
Alternatively, another instrument that guarantees good earnings for the club is commercial selling with sponsorship and merchandise revenues inflating the profit margins.
To illustrate with an example, it is believed that Manchester United trades on an average of 1.7 million football kits annually and through this, the Old Trafford club pockets £80-90 million per year approximately.
Lastly, Prudence Will Not Hurt Anyone
It won’t be wrong to conclude that the clubs have suffered due to the pandemic and unthought and impractical spending. Ideally, these clubs need to introspect whether high-profile names are necessary, especially during these tough times before proceeding with the purchase. For example, there are strong rumours doing the rounds that PSG wants to bring in Cristiano Ronaldo to strengthen their attack once Mbappe leaves their fold. Everyone knows that Ronaldo does not come cheap, so the obvious question is, should the Parisian club go for him despite the fact the Portuguese striker is almost past his prime at 37? Therefore, some prudence on the part of clubs while getting new players or retaining them would go a long way in securing their finance in critical times like these.
