IF I told you that Premier League clubs made a combined loss of over half a billion pounds, you'd probably think that it is an understandable state of affairs considering what they and all businesses have just gone through, and continue to go through, as part of the Covid-19 shutdown.
Unfortunately, this situation takes on an altogether more serious look when I tell you that those losses of £599.54million (€675m) occurred over the 2018-2019 season and doesn't even take into account the out of control coronavirus train barreling down the track for this current season.
This week a report from football financial analysts, Vysyble, showed that despite record revenues of over £5billion (€5.6bn), the much-vaunted earning power of English football's elite clubs hides a looming fiscal dilemma that may become a crisis once the impact of the pandemic is taken into account.
The current situation looks even worse when one extends the study to include the second-tier Championship sides that indicate that the combined losses of the top 44 professional sides in England last season come close to a whopping £1bn.
Vysyble’s analysis, over the years, shows that there have only been two seasons since 2009 (2016-17 and 2017-18), where clubs posted a collective profit, with only 36% of Premier League clubs achieving an annual profit over the same period. Those clubs (unsurprisingly) being among the traditional top six in the table.
Football and the Premier League, in particular, continue to show an overreliance on TV revenue streams, with only Man United making more income from revenue streams other than their TV monies.
Most clubs still required substantial cash influxes from their owners in order to continue doing business. Details from the latest balance sheets indicate that an additional £910m (€1.02bn) in equity was injected into the clubs by their owners for 2018-19, despite the ever-increasing record incomes coming from TV broadcasters.
Even so, with the promise of 'guaranteed' revenue streams from the broadcasters always on the horizon, it has enticed most clubs into evermore extravagant and risky transfer deals for talent, extending themselves beyond what most would see as a practical or safe position, confident with the reassurance that the promised guaranteed monies will look after debts when they come. This was all well and good in a perfect world but as the events of the last four months have shown us we are far from anything being guaranteed at the moment.
Premier League sides are due to pay a rebate to the TV broadcasters for the late finish of the season, with reports indicating that this will increase by £35m (€39m) for every week the season runs beyond July 26.
It could have been worse as it would have been in the hundreds of millions had the leagues decided to call a null and void end to the season as was suggested earlier in the pandemic.
All this exists, while the clubs of the top two divisions continue to do business without the streams of income from advertising or matchday attendances. And that is not just from ticket receipts either, but also includes the substantial millions in revenue from merchandising at the stadium and external club shops as well as the concessions from food and drink bought within the grounds itself.
As the sporting world and society in general looks for a way to continue life in the shadow of a pandemic and with no sign of a vaccine in the immediate future, it is likely that most games, for now, will continue to take place behind closed doors. The serious fear though is that this, or some limited attendance concept, could well continue into next season and even beyond. However, one suspects that few leagues would survive the doomsday scenario of a third-year behind closed doors.
Even if the league and clubs survive such an apocalyptic outcome, it is likely that we will not be seeing the type of extravagances that once epitomised the transfer windows in the Premier League over the past number of years.
A point elaborated by Spurs boss Jose Mourinho in an interview with Sky Sports last week, "To be honest in this moment I think it is the last thing that we are thinking about. I don't see the world and especially the football world, ready for some crazy numbers that we are used to have and some crazy investments that sometimes some clubs, especially some clubs or some leagues, are used to do... we are not going to spend rivers of money and we are trying to respect the situation."
Some will point to the £50m Chelsea spent on signing Timo Werner from RB Leipzig in Germany as proof that the spending spree is still going on. But this is more like the last sting of the bee rather than a swarm of transfer buys this summer. It must also be remembered that Chelsea had spent a season banned from the transfer market so were overdue, even itching, to get back in the market. And while £50m is admittedly still a lot of money, for a talent as good as Werner it would be fair to say that it is a bargain in comparison to the sums spent on far more average players leading into the pandemic.
It will be great to see the Premier League and Championship return to our screen in the coming days but there is little doubt now that the leagues will be a significantly changed entity from what we've become accustomed to and not just because the stands are empty of spectators but because the tills are ringing empty too.