La Liga predicts major losses in 2020/21 season

Spain’s top-flight football league, La Liga saw a €5.045 billion increase in revenue despite the effects of the COVID-19 pandemic. This also represents an increase of 3.6 percent in comparison to the previous 2018-19 season when they generated €4.479 billion. As per the report from PricewaterhouseCoopers (PwC), revenue could have been €5.321 billion if the pandemic had not occurred,

The broadcast revenue accounted for 35 percent of the total as La Liga generated €1.770 billion from its media rights. In fact, La Liga was the only league that profited during the 2019-20 season and achieved a net result of €77 million.

After the 2020/21 campaign, the Spanish top-flight league La Liga is expecting a major loss of £773 million as the entire season was played behind closed doors due to the pandemic. According to the estimates done by PwC for the 2020-21 season, it is expected that total income is about to fall by 29 percent to €3.5 billion with matchday income falling by 66 percent to €271 million. Moreover, the revenue generated from transfers has also witnessed a significant dip, falling to  €349 million from  €792 million. This dip also signifies that the clubs are across Europe can feel the impact of COVID-19 on their finances. 

La Liga president Javier Tebas has revealed that there would be a drastic reduction in income for the 2020/21 season. A decrease in the capital employed and total income ratio which is currently at extraordinary levels is also expected. 

In a statement, LaLiga said: “The bulk of the impact of the Covid will be seen in the 20-21 season, with stadiums without fans and a transfer market characterised by clubs exercising responsibility to face of the situation generated by Covid.”

Tebas also praised Spanish clubs for competing well in La Liga during a difficult year. He said that the economic results would be lower than expected but the clubs prepared well for the competition and managed well during a difficult economy. 

Barcelona has reportedly accounted for half of the losses, further highlighting how poorly the club was managed under the reign of Josep Bartomeu. The Catalan club has a huge debt of €1.04 billion and recently got a loan approved of €525 million which would tackle their short-term problems. Lionel Messi will see his current contract at Barcelona expire at the end of June. Tebas believes that even a special player like Messi will have to take a pay cut in the current scenario to keep playing for Barcelona in La Liga.

On the contrary, Real Madrid got through a difficult year in a much better fashion than Barcelona. Los Blancos are in a sound financial position if we compare them to their rivals. However, they still need better finances to compete with other big European clubs. It was no wonder that Real Madrid was pushing for European Super League.

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