Covid and accounts: Inter chasm, Manchester City and Lille exceptions

Even the champions cry, but those of Italy even more. It is not enough to conquer the national title to put the accounts in order, because if Covid is involved, the budget is compromised.

When costs remain stable and revenues decrease, due to matches played in front of empty stands, the net result is definitely in the red. Inter know something about this, which in June 2021, recording a loss of 245.6 million euros, marked the highest peak in Serie A history. The Nerazzurri are in good company because, as emerges from “The European Champions Report 2022 “, Fresh from the publication by Kpmg, the champions of Spain, France, Portugal, the Netherlands and Turkey also showed significant losses, although much lower than that of Inter: from 111.7 million for Atletico Madrid up to to 8.1 from Ajax, passing through 44 from Besiktas.

The exception

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The only exception among the winners of the main eight leagues is represented by Bayern Munich, which in the balance sheet as at 30 June 2021 showed a profit of 1.8 million, while the net result of Manchester City is not present, as the data of the costs. The Bavarians – at the twenty-ninth consecutive budget with a positive economic result – are among other things the only club capable of reconfirming themselves at the top compared to 2020: in six championships the winner was different, in two cases (France and Holland) it was not It is possible to make a comparison since the 2019-20 season had been declared over in advance. Bayern is also the team with the lowest ratio between salaries and turnover (58%), while Lille is the least efficient club, with an incidence that has exploded to 106%. However, there is no surprise at the huge loss: -465 million overall recorded by the six clubs in the red.

Bad scenario

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Football has in fact proved to be a sector characterized by costs – especially the salaries of players and amortization of cards – which proved rigid, therefore unable to adapt to the changed scenario. So if spending remains unchanged but at the same time revenues decrease, the disastrous scenario is soon outlined.

TV revenues on the rise, but …

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However, the Kpmg report brings to light that it was only stadium revenues that contracted, while revenues from sponsors and television rights withstood the shock wave of the pandemic. Indeed, considering that many matches of the national championship and European cups were played from July 2020 onwards – therefore formally already in the new financial year – the revenues from TV rights have even increased compared to 2019-20. With regard to the proceeds from competitions, however, the eight clubs recorded an almost nil amount, strongly in contrast to the total 359 million that the same eight had recorded in 2019. This is therefore the deadweight loss of the champions due to the stands without fans.

Super city

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Six of the eight clubs that came under the lens had a lower turnover in the last season than in the pre-Covid years. The exceptions were Manchester City, which reached 644 million (96 million more than twelve months earlier), driven by the Champions League final reached in August 2020, and Lille, at 84 million. In June 2021, for the first time in history, the Citizens had more turnover than the Red Devils: United, with its 557 million in revenues, was therefore defeated both on the pitch and in turnover.

Focus Inter

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Focusing on Inter Milan, President Zhang’s team increased turnover up to 347 million (195 from TV rights, 150 from commercial, 2 from the stadium), + 19% on 2020, but in absolute terms it stopped at 20 million. euro less than in 2019. The total expenditure for the squad amounts to 261 million (75% of turnover), while the annual loss of 245.6 million is the highest of the lot: the club that comes closest to the champions of Italy is Atletico Madrid with less than 111.7 million euros. The figure of the Nerazzurri is a negative record along the boot, certainly not in Europe, where in the same year Barcelona – excluded from the analysis because they are not national champions – reached -481.3 million. Inter showed the most evident decrease in net transfer spending (from 125 to 38 million). The market values ​​of players were also strongly influenced by Covid: the 12% decline is mainly due to the sale of important players during the last summer window.

Countertrend

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Conversely, Besiktas, Lille, Sporting and Bayern managed to increase the market value of the player pool from January 2020 onwards. Manchester City currently has the highest squad value (€ 1.2 billion) and is one of three clubs (along with Chelsea and United’s cousins) to cross the 1 billion mark. Space also for social profiles: Bayern Munich is the most followed club (104 million total followers, putting together Facebook, Instagram, Twitter, YouTube, TikTok and Weibo), Manchester City stops at 98 million, while Inter is at 46 million. “The upheaval caused by the pandemic is clearly demonstrated by the huge losses recorded by the eight champions of the most important European leagues considered in our analysis. While the reopening of the stadiums and some important trade deals recently signed may provide some optimism for current and future seasons, the pandemic has only amplified the problems of financial sustainability and the fragility of the football ecosystem as a whole, “he notes. Andrea Sartori, Global Head of Sports of Kpmg.