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Coronavirus could wipe €9.3billion from top Euro squads

Data provided by Swiss-based CIES Football Observatory outlines some of the potential financial effects of the coronavirus outbreak, with Manchester City, Liverpool and Barcelona hardest hit.

Supporters cheer and wave flags from the stands prior to the UEFA Champions League Group D football match between Atletico Madrid and Juventus, at The Wanda Metropolitano Stadium in Madrid, on September 18, 2019. (Photo by OSCAR DEL POZO / AFP)  

Ian Stewart, Chief Economist in the UK for accountancy firm Deloitte, claimed yesterday that the economic impact of the coronavirus crisis has the potential to be the worst experienced in modern times. The global pandemic could have repercussions for all of society and given that football is now such a vast global industry, some have begun to speculate on the financial consequences for the game.

CIES study

The International Centre for Sports Studies (CIES) is an independent research organisation that carries out studies on the economic side of sport. Its research group CIES Football Observatory focuses on players’ transfer values and has looked into football clubs’ prospects post-coronavirus.

Players’ contracts generally end on the 30th June, around a month after the football season ends, so out-of-contract players can change clubs during the summer transfer window. However the delay to the football calendar imposed by COVID-19 has thrown it out of sync with players’ contracts.

At Liverpool, the contracts of Adam Lallana, Nathaniel Clyne and Andy Lonergan are believed to end on the 30th June. Chelsea find themselves in an even worse position with wingers Willian and Pedro, and striker Olivier Giroud also out of contract this summer.

If the Premier League is forced to continue past the end of June, as seems increasingly likely, and no extension is agreed then those players would be free to leave.

However perhaps the greatest issue is the decrease in players’ transfer value when a player enters the final year of their contract, which could happen before another ball is kicked. Paul Pogba, for example, is currently contracted to Manchester United until 2021 but if the Premier League cannot restart until July then he would then be in the final year of his contract and his value would decrease substantially.

CIES explains this effect in a recent post outlining the potential effect on clubs’ finances:

“The extent of the decrease varies according to several factors such as the players’ age, contract duration, career path and recent performance. The greatest loss in relative terms concerns ageing footballers with short-term contracts who played fewer matches during current season than in the previous one.”

They also calculated the potential affect that this could have on the squad values of Europe’s top clubs, based on the assumption that no further matches can be played and no contract are extended until the end of June.

Liverpool, Manchester City and Barcelona were judged to have the most valuable squads as of the 11 March, but the uncertainly surrounding the continuation of the season and their players’ contracts has wiped large amounts off those figures.

FC Barcelona's Dembele
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FC Barcelona's Dembele

Manchester City are believed to be the worst affected with current projections suggesting that by the end of June their €1361million squad value could fall by €412million. Barcelona will be hit with a decrease of €366million, while Liverpool’s will fall from €1405million to €1052million.

Top flight clubs around Europe are vastly wealthy but an average 28% loss of value (€9.3billion across all clubs) in the ‘Big Five’ leagues will undoubtedly cause headaches for club officials, and possibly some very hasty contract negotiations.

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