Sports
Football: Lyon lost €36.5 million in the 2019/20 financial year
Due to the impact of COVID-19 and other factors, Lyon could not count a profit, but rather, a loss.
French football club, Olympique Lyonnais, said its finances have been ‘hard hit’ by the COVID-19 public health crisis, as it announced a loss of €36.5 million (US$42.6 million) for the 2019/20 financial year, compared to a profit of €6.2 million (US$7.2 million) the previous season.
The revenue of the French club in the 2018/19 season was up 19% at the end of March 2019, rising 15% to a first-half record of €61.8 million in the six months to 31 December 2019. This year, there was a setback in their revenue due to the pandemic, which saw their accounts stand at €271.6 million (US$317 million) as of 30th June 2020.
Ticketing revenue fell from €41.8 million (US$48.7 million) to €35.5 million (US$41.4 million) – a 15.1% decline, as Lyon was unable to play six home games following the premature end of the 2019/20 Ligue 1 season on 13 March. This meant the team finished in seventh place, outside of the qualification places for Uefa’s European club competitions.
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Media rights totaled €97.6 million in the 2019/20 (compared to €122.0 million in 2018/19); a result of the premature end to the 2019/20 Ligue 1 season, after the 28th matchdays impacted domestic media rights in two ways
- Canal+ and BeIN paid only part of their broadcasting rights for the season to the LFP
- OL’s 7th place position in Ligue 1 became its final standing (vs 3rd place at the end of the previous season)
- Lyon’s main revenue stream for the 2019/20 campaign was media rights.
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Sponsoring/advertising revenue suffered from the mid-March business shutdown and totaled €27.2 million with a decline of €4.2million and a fall of -13% when compared to €31.3 million in the 2018/19 season. Brand-related revenue was down with a decline of €2.4million, to €13.6 million (US$15.8 million).
Revenue from the Events business totaled €6.7 million over the full year, down 30% from €9.7 million in 2018/19. In accordance with the government’s measures prohibiting large gatherings, the Group was forced to cancel all of the summer events scheduled for Groupama Stadium, in particular, the first “Felyn” music festival, now postponed to 18 & 19 June 2021.
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OL Groupe incurred an operating loss of €18.4 million in 2019/20 (vs a profit of €22.2 million in 2018/19). The change reflected an increase in Net depreciation, amortization, and provisions (€76.2 million in 2019/20 vs €52.3 million in 2018/19), as a result of trading at the start and in the middle of the season (amortization of player registrations).
Operating profit/loss in 2019/20 included exceptional assistance of €12.9 million, recognized as “Other ordinary income and expenses” and deriving from the government-guaranteed loan received by the LFP. This is equivalent to the balance of LFP media rights the Club did not receive.
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Net financial expense totaled €17.9 million (vs €14.0 million in 2018/19), tied principally to the non-recourse financing of player registration receivables implemented during the financial year. The pre-tax loss is €36.3 million in 2019/20. The net loss (Group share) was €36.5 million, against a net profit (Group share) of €6.2 million in 2018/19.
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However, despite the ongoing financial impact of COVID 19, Lyon said,
“OL remains confident in its ability to achieve the objectives set for the period from now until 2023/24, as presented last February; i.e. total revenue of €420-440 million (including player trading, according to the API as indicated above), and EBITDA in excess of €100 million, assuming the current public health crisis is resolved in the short term. This is based on our “full entertainment” growth strategy oriented around our core business – football – and also on the development, diversification, and recurrent nature of our “Events” programming, related in particular to the new arena project.”
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Sports
Football: AC Milan announces loss of €195million
Italian football giant, A.C. Milan has announced a loss of €195million in the fiscal year of 2019/20.
Associazione Calcio Milan, commonly known as AC Milan announced losses of €195million in the fiscal year of 2019/20, which was due to ‘extraordinary circumstances’ compared to the €145.9million loss in the 2018/19 fiscal year.
According to Sports Business, the Italian side posted a loss of €145.9m for the 2018-19 financial year and a loss of €125m for 2017-18. It has now registered cumulative losses of nearly €700m over the past seven seasons, due mainly to dropping out of the Uefa Champions League over that period.
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The draft financial statement of the fiscal year 2019/2020 which ended by June 30, 2020, was approved by the Board of Directors of AC Milan as of last Friday. The draft is planned to be submitted in the next Shareholders meeting scheduled for 28 October 2020.
An official statement from the club said the 2019/20 season was heavily affected by the global pandemic and it was also due to the situation inherited from the previous ownership.
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The club said the health emergency affected the financial statement which as a result caused low revenue from the San Siro Stadium and other retail stores like Museum, Store, Casa Milan, etc.
In addition, the club referenced the impact of the pandemic on revenues of Serie A media shared by clubs, which led to the postponement of the TV rights to the 2020/21 season. The club also referenced their ban from the Uefa Europa League after breaching the Financial Fair Play rule.
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However, the club qualified for the Uefa Europa League after they finished 6th in the 2019/20 season and won their playoffs. They are hopeful they’ll be able to recover the amount lost due to their ban last season. They said, “that will be recovered in the next financial year.”
“With the 2019/20 season heavily affected by the global pandemic, there was a negative impact on the Club’s financial performance, one which was already suffering due to the situation inherited from the previous ownership. As a result, the Club registered a full-year net loss of approximately €195m.
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“The impact of the health emergency on the Club’s financial statements is as a result of the lack of matchday revenue and the subsequent reduction in commercial activities and lower revenues from the retail sector (Museum, Store, Casa Milan, etc.)
“Furthermore, the limited number of matches played (10 Serie A matches) in July and August 2020 also weighed on the accounting records and led to the postponement of part of the accrual of the TV rights for the 2020/21 season.
“Finally, it is worth noting that the Club was banned from taking part in last season’s UEFA Europa League, which had a further negative impact that will be recovered in the next financial year.”
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The club also commended its owner, Elliott Management Corporation, an American investment management firm, for their constant support through the herculean time.
“The constant support of Elliott, which guarantees the financial stability of AC Milan, has however allowed important investments and the effects are expected in the short term.
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“At the same time, the Club launched an effective cost efficiency policy that entailed a significant reduction in player wages and top management salaries,” the statement continued.
The European Club Association has estimated that the European football industry will lose more than €3billion due to the global pandemic over the next two seasons, with 90 percent of this impact weighing on clubs.
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Entertainment
English Premier League fans to pay more for BT sports, Skysports matches
Following interim arrangements as the COVID-19 pandemic persists, EPL fans may have to pay more to watch league matches.
The English Premier League fans face the prospects of paying more for league matches, as measures are being introduced in response to the adverse impact of the coronavirus pandemic on matches.
The league has rolled out interim broadcast arrangements that will allow UK soccer fans to watch more games at a cost, while the COVID-19 pandemic keeps them away from stadiums.
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According to a report from Bloomberg, fans of the UK’s 20 elite clubs will be able to pay for additional October matches on either of the BT Sport Box Office or Sky Sports Box Office platforms that would not otherwise have been broadcasted.
The league authorities in a separate statement noted that BT and Sky will continue to offer subscribers their existing October schedule of matches, and will charge £14.95 ($19.43) for each of the extra games they show.
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The Premier League in its statement disclosed that clubs agreed to the additional measures to enable all fans to watch their teams live, following the playing of the league games behind closed doors due to the pandemic. Although. a top pundit at Sky, Gary Neville, was quite critical of it.
Gary Neville, who helps front Sky’s match-day coverage, in a tweet post, said, “This is a really bad move by the premier league to charge £14.95 for single matches that have been shown free for 6 months.”
European clubs, including premier league clubs, have been complaining about the shut out of fans from league games due to the pandemic as this has seen their revenue drop drastically. A huge part of their income is from ticket sales to fans, which they don’t enjoy at the moment.
The Premier League is expected to use the additional pay-per-view money to support its clubs, which have seen match-day sales evaporate because of the pandemic. In a report published in June, a consultancy firm, Deloitte, estimated a roughly 1 billion-pound revenue hit for Premier League clubs in the 2019/2020 financial year.
Fans have been banned from attending matches live since the spring, in a bid to help curb the spread of the COVID-19 virus. The Premier League said on Friday that it was committed to the safe return of fans as soon as possible.
Why it matters
The 20/21 Premier League season has shipped in more goals after 4 games than any other season in the league’s history. The most competitive league in the world has seen matches played behind closed doors since Project restart. Still, Club fans can only watch their teams when it is televised; however, BT, Sky are offering extra matches to fans at a cost, which will also generate revenue for the clubs. It is a win-win situation.
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