Close to 200 clubs could go bankrupt due to COVID-19 crisis

There are fears that close to 200 football clubs could go into bankruptcy due to the coronavirus pandemic, a leading club director has stated.

Significantly reduced activities in the multi-billion pound transfer market as well as possible payment defaults with regards to player deals that were made before the shutdown could contribute to this.

These concerns were raised in a debate that was hosted by a FIFA-back research center. These were the concerns of Locomotiva Zagreb director Dennis Gudasic. He said:

“I think the biggest threat to club football in the coming six months is going to be the survival of smaller clubs,”

He went on to warn of a “drastic situation whereby we have maybe 100, or 200 clubs go bankrupt in September or October” if challenges facing smaller clubs were not sorted out.

It can be recalled that clubs across Europe have been denied commercial revenue as there have been no games for at least two months. This is with the possibility of only empty stadiums being allowed for games in the nearest future until the pandemic is quelled.

The leader of the European Club Association (ECA) Andrea Agnelli, in March, predicted that clubs were in danger of an existential threat. The Juventus president noted that the COVID-19 outbreak is the biggest challenge that the football industry has ever faced.

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Therefore, clubs are hoping that the buoyant leagues complete their seasons so that money paid by broadcasters for contract fulfilments can be used to revive the transfer market.

“This is where there is a lot of uncertainty,” Gudasic said, adding that some Croatian clubs in terms of budgeting had become heavily dependent on transfer revenue from their former players.

He made these comments during an online panel discussion that was hosted by the International Centre for Sports (CIES) at the University of Neuchatel in Switzerland.

Meanwhile, University academic Raffaele Poli also warned that clubs could go into bankruptcy whilst waiting for installments from player deals made in the past two years.

“I’m not sure all clubs will be able to pay,” Poli, a leading analyst of transfer values worldwide, said.

Man United scout Piotr Sadowski also added that clubs in Eastern Europe such as Croatia can still complete deals even if the transfer market is slower.

FIFA have also agreed to maintain flexibility during the July-August trading period in Europe since there’s no set time on when the current season will end and when the 2020/21 campaign will commence.

’This would be a good idea to make like a six months transfer window from summer to winter 2021,” Sadowski said. “It would give all those clubs a chance to better plan transfers and their budgets.”

Gudasic noted that clubs whose brands were global would flourish even in these tough times: “Let’s face it, ECA is not representing the smaller clubs.”

“Now we are waiting to see what is going to happen in Europe,” the Lokomotiva director said. “It’s very difficult (to see) when or if the situation will come back to normal.”