29.09.20 Quarterly Insight

Revenues across five major UK sports are set to decrease by up to £1.8 billion ($2.3 billion) across 2020-21 due to the impact of the Covid-19 pandemic on matchday and commercial income.

Oakwell Sports Advisory, the London-based sports advisory firm, calculated the figure based on financial research into soccer (Premier League & EFL), rugby union (Premiership), rugby league (Super League), cricket (First-class county cricket) and horse racing (racecourses) in the country.

Soccer’s Premier League is in line to be the most affected, with a loss of up to £1.07 billion this season if fans are not allowed back in stadiums and £820 million if supporters return, which represents a 15 to 18 per cent decrease in total revenue.

On average, 13 per cent of club revenue in the Premier League is generated from matchday activity.
In comparison, club revenues in the second-tier EFL Championship are expected to decline from between £141 million and £180 million for the 2020-21 season, a 19 to 24 per cent decrease in total revenue.

Oakwell’s research projects that Championship clubs could lose as much as £221 million without fans, with matchday revenue accounting for 28 per cent of total revenue for clubs which do not receive parachute payments after relegation from the Premier League, and 12 per cent for clubs which do.

In other sports, the firm expects revenue for clubs in rugby union’s top-tier Premiership to decrease by up to £67.2 million, a 28 to 35 per cent decrease in total revenue, while it predicts reduced central distributions from the Rugby Football Union, the national governing body, could expose clubs to an additional £29 million revenue short fall, which represents a 50 per cent decrease in overall income.

On average, Premiership clubs generate 30 per cent of their income from matchday sales, and 42 per cent from central distributions from the RFU and the PRL, the administrative arm which represents the league’s 13 clubs.

In rugby league, matchday revenues for clubs in the Super League are set to fall by up to £23.2 million as games were played behind closed doors for the remainder of the 2020 season.

The 2020 Super League campaign was suspended on 16 March, with approximately a third of the season played. Super League clubs rely heavily on matchday income, as it accounts for around 60 per cent of each team’s overall revenue.

In addition, Oakwell said “revisions of broadcast contracts and loss of ticketing income from major events could have a significant impact on future central distributions to the clubs.”

Elsewhere, county cricket faces a reduction in revenue of as much as £67 million if another season is impacted by Covid-19, which would represent a 34 to 43 decrease in overall turnover, while in horse racing, total revenue for UK racecourses could drop from between £215 million and £284 million, a potential 35 to 47 per cent fall.

The continued decline in revenues across the five sports became more likely after the UK government this week ruled out the return of spectators at matches next month.

Leading sports bodies expressed disappointment at the decision and warned that this threatens to have a severe financial impact on top of that caused by the pandemic.

With pilot events having been held in recent months, it had been anticipated that larger crowds would be permitted at stadiums and other venues from 1 October.

However, a rise in Covid-19 cases across the UK has prompted the government to impose stricter rules on social gatherings, meaning this is now on hold.

With prime minister Boris Johnson suggesting that the restrictions could remain in place for six months, it could be late-March before spectators are able to return, denying much-needed matchday revenue for the domestic sports industry.

On Monday, more than 100 UK sports bodies wrote to Johnson asking for emergency funding because of the impact of the pandemic, which wiped out schedules for three months, and in some cases longer, this year.

There are reports that a rescue package worth more than £1 billion is being negotiated for the most needy federations and leagues, but this reportedly will not include the Premier League and English Football League.

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