The impact of COVID on Spanish professional football

COVID has severely affected sectors such as the football sector, completely closing its facilities and, therefore, the entry of fans to the stadiums. A sector that, in the new normal, will have to seriously rethink its sources of income.

Faced with an unprecedented crisis like the one that is happening to us today, few have been the sectors that have come out successful.

Due to the nature of this pandemic, the economic activity that was developing normally was relegated to the background; forcibly paralyzing, before a virus that, due to its high contagion rate, was brutally spreading throughout the world. Given the situation shown, as well as this inability to contain the pandemic, any possibility of taking risks, allowing scenarios in which the economic activity that until then was developing, continue to develop, was more than ruled out for any of the affected countries . All this, incidentally, causing a negative supply shock throughout the planet, which completely depleted the economy, as well as the forecasts of an imminent recovery. Well, given the data that the Coronavirus left in society at the health level, what a priori was a dichotomy finally opted for prioritizing the health of citizens and not, on the contrary, and as expected, for health of economies.

However, there is an asymmetric impact between sectors. Among the most affected, we can highlight the tourism sector or the sports sector. Which have not fared as well as, for example, the electronic commerce sector. The forced stoppage of economic activity in sectors that require social contact meant the assumption of losses that, due to the inability to open their doors, are already registered, and very notably, by the member companies. Million-dollar losses that, only calculated for the tourism sector, account for 57% of the decline in GDP, according to studies carried out by the hotel and catering industry, which Spain plans to register at the end of the year. Losses that have spread to other sectors, while the pandemic continued to spread, while outbreaks were getting out of control.

Football, a sector with large digits

In Spain, particularly, there are many fans who, every weekend, go to the stadium to watch their team play and, incidentally, enjoy some leisure time with the family. However, with COVID, these types of plans can no longer be viewed in the same way; starting from the fact that the stadiums, since the wave of infections broke out, already carry out their activity behind closed doors, and without the ability to host fans who cheer on the stands.

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As we see, a situation that, although it seems an acceptable situation for society, which means not going to the stadium for a society concerned about its health, is not acceptable for the different clubs, which depend on this activity, as well as the income. that this generates, in part, to continue developing its institutional activity.

To get an idea of ​​what COVID means for the football economy, as well as the indirect effects of this on the economy, we can base ourselves on studies and past seasons.

In this sense, taking the Spanish soccer league as an example, as well as its four important clubs, we are talking about losses that, as we will see, compromise the future of these clubs. In this way, Real Madrid, for example, with an average income per game of 5.3 million euros, collects, only in tickets, about 132 million euros per season. On the other hand, FC Barcelona, ​​with a revenue of 4.6 million euros at the box office per game, collects approximately 130 million euros per season. Thus, in computation, we are talking about the fact that, taking into account only the sale of tickets for the two most important clubs in the Spanish league, COVID already means for both clubs the loss of 260 million euros that will not enter.

In third and fourth place, we have Athletic Club de Bilbao and Atlético de Madrid. Both clubs, respectively, enter 1.2 and 1.3 million euros per game. This, at the end of the season, leaves an aggregate income for both clubs of 36 million euros, which will also stop entering. All this, as we can see, leaves us with a final aggregate that, given the situation, implies the loss of more than 350 million euros, only, taking into account the losses at the box office that this suspension implies for, as we said, the four main clubs of the Spanish league.

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However, taking into account the losses estimated by La Liga after the last two months of the season had been suspended, taking into account all the clubs that make up the competition, these amount to 680 million euros. And, previously, we have only taken into account the ticket offices, as well as four clubs, but we are talking about 42 clubs, as well as income from season tickets, income from merchandising, advertising, as well as other items that, indirectly, left a lot capital in the coffers of these clubs, as well as other types of related businesses.

A little expendable contribution

Although it may seem insignificant to us, football is a sector of great importance for the Spanish economy. According to a report signed by PWC during the competition in 2017, the Spanish league, with the 42 clubs that make it up, accounts for 1.37% of Spanish GDP. This is due to the fact that the professional football industry generates an annual income of 15,688 million euros in Spain. In addition, incidentally, to these revenues we would have to add other additional revenues, which we call ‘tractor impacts’. Income that is related to the sectors of restoration, accommodation, bars and national tourism, which during the season were almost 4,000 million. Taking these into account, we are talking about an aggregate of 20,000 million.

And it is that, the celebration of parties in the stadiums supposed a volume of business in the sector of the hotel, transport and accommodation of 2,398 million throughout the entire season analyzed in the study carried out by the firm. A study that indicates, incidentally, how, for example, Spanish bars earned about 1,220 million euros thanks to the broadcast in their facilities of football matches of the Spanish Professional Football League.

But we must not only talk about income, but we must also do it, due to its importance, about employment. Thus, we must take into account the contribution that this sector makes to employment, knowing that the football activity of the 42 Spanish professional clubs of the First and Second Division employs 185,000 people in the country. As we can see, a great relationship of jobs generated by football in Spain during the season, and that, to get a better idea of ​​what these mean for our labor market, represent 0.98% of the employed population in the country.

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However, as was the case before, we must add that we only speak of direct employment, since if we take indirect employment into account, we must emphasize that for each direct job created by the league, four more are created indirectly. This produced that, in the period indicated in the study, the income generated by the bars by the broadcast of games generated, according to the analysis, 19,415 indirect jobs in the country.

This shows that, although the bulk of the income of the clubs is determined by the negotiation of emission rights, the losses that said sector expects to register in the new normality are very remarkable; especially when we take into account the employment that, due to the changes that this sector will undergo, will be lost, in the same way as those indirect ones that, in the new normal, are not supported. And it is that, in the face of a deterioration such as that experienced by the economy, as well as a forecast that places the Spanish unemployment rate at 25%, the burden of another sector, such as the football sector, as well as the consequent loss of productive capacity in the new normal, continues to darken the future of an economy that, a priori, had many vulnerabilities.

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