How much did the Football Industry lost?

I’ve decided to tackle a little bit of football today as the season resumes.

Turkish Football Federation (TFF) had released the following statement before the re-start of the season: “If a player tests positive for COVID-19, anyone who has been in physical contact with that player will be out into quarantine.” I think this will be another type of elimination. I’ve really wanted that the rest of the season could be played out using elimination process just like a tournament and this statement of the TFF makes is clear that the Federation has now adopted something between regular league matched and tournament.

Joking aside, there’s a rumour going round that TFF may ley the remaining matches be played in front of a fewer audience but the recent increase in the number of coronavirus cases can make them change their minds. The reason why the Federation pursues such risky ventures is because, over the past months, Turkish Football economy has incurred huge losses, which yet remain to be unknown.

Naturally, it was the United Kingdom that ran a statistics on how much its football industry lost during the pandemic, declaring that Premier League might face an approximate loss of 1 billion pounds due to coronavirus.

Deloitte’s “Sports Business Group” report, which was released on last Thursday, says that the fact that Premier League has halted since the mid-March caused football clubs to incur substantial losses.

The reports highlights that half of this loss of almost 1 billion pounds consists of refund to broadcast companies, ticket discounts and decline in operating profit. The other half of the loss will occur in next year’s revenue.

Premier league matches scheduled to resume on June 17 will air live on Sky Sports, BT Sport, BBC Sport and Amazon Prime, but without crowds

“How much did Turkish Football loss?”

How much Premier League used to win back in its glory days? In 2018/2019 football season, Premier League had earned a revenue of 5.2 billion pounds, defending its title of Europe’s richest football league. Besides, a substantial part of the clubs’ commercial revenues depends on an economy that gets nourished by the number of supporters rather than the club’s success.

For instance, Newcastle United, Premier League’s best supported club on many occasions, has recently received a big offer from Saudi Arabians, who proposed £300m takeover of Newcastle. This club plays almost its every match in front of 52,000 Newcastle United fans, occupying 16thplace in the broadcast revenues table. Even the Big Three of Turkey (three most successful sports clubs based in Turkey, Istanbul), the football teams of Beşiktaş, Fenerbahçe and Galatasaray can’t make it into the top 20.

The share of the Big Three’s revenue from broadcasting rights when compared to total revenue remains around 40-45%. When you look at towards the bottom of the league, you can see the lesser clubs’ share is down 80%.

How to achieve a fair distribution of revenues? According to the UEFA reports, average revenue of clubs that take part in European Championships is shaped as follows:

Table: UEFA average in total revenue and average percentage of Turkish Teams that take part in UEFA Cups:

  • National League Live Broadcasting Share 37 % (Turkish Teams 40%)
  • Sponsorships 23% (Turkish Teams 33%)
  • Ticket sales 15% (Turkish Teams 10%)

-UEFA revenue 10% (Turkish Teams 11%)

  • Commercial revenues 8% (Turkish Teams 5%)
  • Other revenues 7% (Turkish Teams 1%)

As can be seen from the table above, Turkish Teams competing in UEFA championships seem to have adopted the general principles of European football in terms of revenue earning. Clubs who are bottom of the league face the real challenge of living on the edge of collapse because, without their share of the broadcast revenue, they wouldn’t survive a day.

Although the “let people watch football on television without needing a password and a username” proposition sounded quite reasonable in terms of preventing people watching football in cafes or restaurants from getting infected with the coronavirus, it failed to obtain approval. Besides, people have already started violating social distancing rules everywhere, let alone watching football matches in cafés. We might soon see second wave of Covid-19 cases.

Anyway, let’s calculate roughly how much loss Turkish Football will incur because of Covid-19. According to rough estimates, Premier League will lose 20% of its total revenues this year and the next, which is 1 billion punds. The total of revenue of Turkish Süper Lig is around 4.5 billion TRY. Considering that Turkey too might lose approximately same amount of revenue, Turkish Football would incur a loss of at least 1 billion TRY. But the distribution of this revenue would differ from that of United Kingdom when we consider debt to revenue receivable ratio in Turkish Football.

Considering its restructured debts, it is quite likely that Turkish Football will face hard times over the upcoming years. If a second wave of coronavirus hits Turkey, even the Big Three might not be able to survive. So, I strongly suggest everyone have a backup plan ready.