Match-day revenue and Covid 19

[Marvin]

I was wondering now that City are seemingly exiting the UEFA/CAS crisis, and our future is a litte clearer, how we stand financially vs our opponents. Are we all Covid losers? Maybe, but some will surely be affected worse than others, i.e. those with high debt, and who are financially stretched and who are reliant on high match-day revenue?

In the immediate aftermath of the takeover, money was no object. We bought who we wanted, but for 3-4 seasons now the likes of Man Utd, Real Madrid, PSG, Barcelona have outgunned us in the transfer market. The very best players such as Hazard, Mbappe, Neymar, VVD were beyond us. Domestically although we have still spent a lot of money in the transfer market it's no longer off the scale. For example, and fortunately perhaps, we were unable to compete with Man Utd for Pogba, Sanchez and Maguire.

Will Covid change this?

Covid-19 will destroy match-day income for a year. It will also have an effect on broadcasting income but how and who will be harder to judge. Below I summarise City, and our competitors position using data (£m) compiled by David Conn, in his annual reviews of football finance. It's a little out of date. And I also have a graph from the BBC summarising match-day revenue across the whole league.

Source: https://www.bbc.co.uk/sport/football/52529679

This data does not capture the recent growth of Liverpool given their Champions League and Premier League success. City have also had a good couple of years since 2017/18. Spurs have now taken on significant debt, but presumably on very good terms given interest rates. Chelsea's debt is to Abramovic, and can be regarded as 'soft' i.e. not a financial burden for the club at the moment.

If we assume that the effects of broadcasting will be neutral across all clubs, then the differential hit will be to Manchester Utd, Arsenal and Spurs. A great pity Man Utd scraped into the Champions League. That has rescued them. Spurs and Arsenal could be in trouble though?

An unknown will be the worldwide cost to the City Group - something unique to City. In a way, if City are still in acquisition mode, this may present an opportunity to acquire clubs as it will destroy value.

The other aspect I have not considered is possible relaxation of the Financial Fair Play regime through the Covid period. Have any changes been formally made, or suggested?

I am very confident that there will be a vaccine towards the end of the Autumn so I see this crisis as short-term ending this Winter, although there will be some doubt there.

Potentially clubs with owners who are prepared to invest in their playing squad and infrastructure maybe presented with an advantage now. Do we come into that category any more? For example, what has happened to the stadium plans? We also have been careful in the transfer market for some time i.e. pulling out of bids for players even when there was no alternative.

 

[Centurions]

Awesome Marvin, you've just gone and written The Guardians headline for tomorrow.

Man City profit from Covid Virus and crow about it.

 

[Marvin]

Awesome Marvin, you've just gone and written The Guardians headline for tomorrow.

Man City profit from Covid Virus and crow about it.

I wasn't crowing, I was trying to figure out the consequences for football and who where it leaves everyone. Hitherto we've all been thinking about UEFA/CAS. I doubt anyone media organisation are that interested in what fans think about their own clubs / rivals.

Edit: I changed the topic title in consideration of your comment.

 

[MillionMilesAway]

Presumably it depends on how broadcasting income is affected - I don't think that's known, and I would guess is affected by how long things go on. Almost certainly that at least half of next season is affected.

Direct sponsorships to clubs may also be affected, that's maybe less likely.

Chelsea had the fallback of having no transfer spending last year, so they've done okay. Spurs presumably get hit badly by having no crowd (in their big stadium which would increase matchday income hugely) and also broadcasting income and no CL.

Liverpool's income will be a lot less this season as they've made the CL final two years running.

 

[Marvin]

Presumably it depends on how broadcasting income is affected - I don't think that's known, and I would guess is affected by how long things go on. Almost certainly that at least half of next season is affected.

Direct sponsorships to clubs may also be affected, that's maybe less likely.

Chelsea had the fallback of having no transfer spending last year, so they've done okay. Spurs presumably get hit badly by having no crowd (in their big stadium which would increase matchday income hugely) and also broadcasting income and no CL.

Liverpool's income will be a lot less this season as they've made the CL final two years running.

These are things I thought of too. Spurs look like the club most under pressure. Perhaps that's why Mourinho was celebrating Europa League qualification on the last day.

 

[Centurions]

I wasn't crowing, I was trying to figure out the consequences for football and who where it leaves everyone. Hitherto we've all been thinking about UEFA/CAS. I doubt anyone media organisation are that interested in what fans think about their own clubs / rivals.

Edit: I changed the topic title in consideration of your comment.

I didn't say you were crowing bud, you of all people should know how The Guardian operate.

 

[Marvin]

I didn't say you were crowing bud, you of all people should know how The Guardian operate.

I wish I was that influential. Some day maybe;

 

[bluemoon32]

Maybe a stupid question but why is Liverpool's matchday revenue so much more than ours ?

 

[Centurions]

Presumably it depends on how broadcasting income is affected - I don't think that's known, and I would guess is affected by how long things go on. Almost certainly that at least half of next season is affected.

Direct sponsorships to clubs may also be affected, that's maybe less likely.

Chelsea had the fallback of having no transfer spending last year, so they've done okay. Spurs presumably get hit badly by having no crowd (in their big stadium which would increase matchday income hugely) and also broadcasting income and no CL.

Liverpool's income will be a lot less this season as they've made the CL final two years running.

I'd forgotten about Chelsea s transfer ban. Along with rolling this summers spending in with next years, that gives them 3 summers worth of spending for this window if they wished?

 

[Prestwich_Blue]

Saved me looking this up for myself Marvin but I'd make one minor point, which is that net debt is a poor way of looking at debt. United's actual debt is double the net debt at their 2019 year end. All net debt means is gross debt, minus cash balances at that particular date.

But it's clear from that that matchday revenue is about 11% of our overall income whereas it's closer to 20% for the others, so will hurt them proportionately more. Who'd have thought our vast swathes of empty seats were actually a financial benefit?