Coronavirus, sports and the financial cost | Business| Economy and finance news from a German perspective | DW | 14.03.2020
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Coronavirus, sports and the financial cost

Most European leagues have stopped play because of COVID-19. Handballers, ice hockey players and now footballers have entered into an indefinite break in Germany. What does this mean economically?

Watch video 02:37

Bundesliga stands to lose big in the corona crisis

Many football clubs cultivate a myth that is intended to demonstrate the bond between the fans and their club. The story goes like this, with regional differences: If we just turn on the floodlights at home, a few thousand spectators will come to see what's new.

That doesn't work in the current days of coronavirus fear, of course. Or at least it shouldn't. Because even if a game like this week's Rheinderby between Borussia Mönchengladbach and Cologne takes place as a so-called ghost game in front of empty stands, hundreds of fans gather in front of the stadium. Disease prevention looks difficult.

On March 13, German football reacted to the danger of infection by the coronavirus. At the suggestion of the German Football League (DFL), games in the first and second Bundesliga in Germany are to be completely suspended until at least April 2. It is not yet possible to estimate how expensive this measure will ultimately be for the sport — but it will certainly not be cheap.

No spectators until April

Professor Christoph Breuer from the Institute for Sports Economics and Sports Management at the Sports University in Cologne does not want to comment on how sensible it is to compete under exclusion of the fans, i.e. to organize so-called ghost games or to cancel all games at once: "Only a medical doctor can answer this question."

In any case, empty stadiums would have far-reaching consequences, Breuer tells DW: "Audience income is a central source of income for professional sports. These are now breaking away." Furthermore, according to Breuer, "the other sources of income, sponsoring and media revenues, are also at risk because the contractually agreed service cannot be provided".

A cameraman films the Rheinderby in an empty stadium on March 11

The behind-closed-doors Rheinderby was the last Bundesliga game to be played, on March 11

It's really dark in the basement

In the lower leagues, the economic situation for clubs is generally more precarious than in the upper football leagues, explains Breuer: a crisis like the current one "hits clubs in the lower leagues relatively harder. On the one hand, spectator revenues account for a larger share of their total revenues. On the other hand, the liquidity position is more strained anyway. Even before the COVID-19 crisis, two out of three third-division clubs were already in the red. None of the clubs in the first division are.

Even further down the line it gets really gloomy: Kickers Emden, for example, was on the threshold of paid football just a few years ago. Today, the "Deichkickers" play in front of about 500 spectators each week in the upper league of Lower Saxony. Albert Ammermann, deputy chairman of the club, complained to the Ostfriesenzeitung: "We are not on a bed of roses anyway and could hardly cope with such a loss of income." Because of the numerous home games that have already been canceled due to the weather, "the situation is already tense."

Beyond the day

But it's not only this week and next week's matches that are causing headaches for club treasurers. If the games are made up for, losses could still be limited. It's still not certain, however, whether further matches will be canceled or postponed. It also shows how interlocked the match schedules are — from the regional leagues up to the Champions League.

A curtailed season leaves many questions unanswered: Who will be promoted? Who will be relegated? Who can qualify for which European competition? Breuer considers these problems to be difficult to control. Such decisions might have to be made at the green table and not played out on the green turf.

This is where Breuer sees European football in a difficult position. "Sporting decisions about promotion and relegation are generally accepted, decisions at the green table are not. In closed leagues like the ice hockey league or the American professional leagues without relegation and promotion, this is much easier," he said. On the other hand, in the German Ice Hockey League (DEL), for example, ghost games would be unthinkable. In view of meager TV funds, the clubs are mainly dependent on ticket sales — and many German hockey clubs are chronically short of cash anyway. So it was only logical to cancel the season before the playoffs began.

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And the football 'recyclers'?

You don't necessarily have to feel sorry for faceless billion-dollar companies such as the private broadcasters Sky or Dazn, and very many football fans are generally suspicious of these rights holders. But at least it's their business model that is being questioned here.

And doubly so: On the one hand, their contractual partners cannot "deliver" — because if there is no match, there are no more goods to be sold. And on the other hand, the rights exploiters have a duty to their customers — the paying broadcasters finance themselves through subscription contracts with them.

Traditionally, the private broadcasters are very cautious about their business figures; they never give out more than what they are legally obliged to. You have to wait for the next balance sheets to see how expensive the coronavirus has been to this industry.

The calls of the state

In any case, the associations need not hope for financial help from the state. When SID (Sport Information Service) asked the German Interior Ministry, it received the following answer: "There are no federal budget funds available for sports at club level. This also applies to the professional leagues."

According to SID, support could be provided by the Economy Ministry at most, but only in the form of loans. Because "effective instruments are available at short notice to support companies," according to the ministry, if the club is "a commercial enterprise."

Breuer, however, doesn't think much of state aid. He puts forward another solution: instead of letting the taxpayer secure professional sport, "an opening for investors would be a more economically sensible alternative."

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