IF THE January transfer window seems quieter than even its usually sedate manner, then you are not wrong. While we in the media do our speculations on the possible comings and goings in the leagues of Europe, very little is actually is happening on the ground or grounds of club football.
An idea to the reason behind the inaction comes with KPMG reports this week that Liverpool are looking down the barrel of a £42m (€47m) operating shortfall for 2020. Not the kind of news a club would expect to receive in the year that saw you move from European to world champions and, after a 30-year wait, Premier League champions. But the coronavirus pandemic and its resulting hit on stadium attendances, TV rights, and merchandise sales, have left the league champions looking at a significant hit to their revenues, rather than what would have been an expected healthy boost to the club's bank balance.
In Liverpool's favour, what they have managed to earn from being champions has softened the financial blow to a degree not afforded their rivals in the rest of the league.
Manchester United's finances have been hit even harder than expected by the side-effects of the pandemic. The Old Trafford outfit announced a £71m (€80m) hit on returns on top of what the club expected, according to their year-ending financial figures, released at the end of October last year. Before the pandemic, United had estimated their revenue to be between £560m to £580m, down on the previous year's record of £627.1m (€706m). But the figure ended up being £509m, down £118m (€113m) in total, almost double what the club had anticipated.
If anything, things are even starker for other clubs. Tottenham Hotspurs announced annual losses totalling £63.9m (€70m) for the financial year ending June 30, 2020. By the end of 2020, it's estimated that the north London side could be down financially to the tune of £150m (€169m).
It must be remembered that Spurs are also paying-off the loans on a brand new stadium that cost £1.2bn (€1.3bn). Their situation is so dier that Spurs chairman Daniel Levy warned that there will be an even greater “irrecoverable loss of income” until fans are let back in.
To be fair, the above numbers are lost earnings, all of these clubs will return profits. The same is unlikely to be said for three-quarters of the clubs in the Premier League not to mind the Championship and lower divisions, where it remains to be seen whether the pandemic will prove to be an existential battle for their very survival.
TV rights are the only thing keeping most clubs going, but even here the Premier leagues face legal action from Chinese and international media groups for their own lost earnings when the league was put into lockdown last March for three months.
Shirt sales and merchandise within the clubs own stores would have been hit by closures too even if clubs mitigated the loses by opening pop-up stores the way Liverpool did on Patrick St in Cork.
Sponsorships, like shirt-deals, were hit too where contracts were not completed through the absence of completed matches, titles, and shirt sales.
Anyway, the revenue from shirt and training gear sponsorship is often exaggerated, often only 7% of shirt sale's profits going back to the club itself. Nevertheless, it is still a significant wedge of cash if some or all of it is lost. Especially to the revenues of the small clubs.
The story is replicated across the European leagues with operating profits on average down between 20 and 50%.
For fans hoping to get that lethal striker, that midfield visionary, or that rock-solid centre back to finally complete that perfect line-up, I would recommend you don't hold your breath, certainly not for this January transfer window and maybe even for this summer's one too.