Did Retail Brokers Save Football?

• The pandemic caused a crisis in football with matches canceled or played in empty stadiums
• However, online brokers spent $125 million in the 2020-21 season on football deals

English football clubs have just ended a record summer transfer window in 2022 after combined estimated spending of €2.23 billion. Other European leagues also spent aggressively, but it was nowhere near the English Premier League (EPL) clubs: the closest was Italian Serie A with €749.2 million.

However, clubs trade players, meaning the net spending numbers can be either positive or negative (positive if the clubs earned by trading players). On that too, EPL dominated with net spending of €1.35 million of net spending, whereas Bundesliga and League 1 clubs earned.

However, the aggressive spending by European football clubs today is a far cry from the position most clubs found themselves in just a couple of years ago. Football and many of its sponsors took a massive hit during the pandemic months. Matches were canceled across the board and then played behind closed doors in empty stadiums.

The Premier League?officially canceled all matches?on 13 March 2020, only to resume the season on 17 June, with matches taking place behind closed doors. Even the 2021-22 play season started behind closed doors. All the clubs were only allowed to open up the stadiums in a limited capacity in May 2021. The games returned to normal with fan-packed stands in the 2021-22 season.

Apart from the sentiments of fans, it was a nightmare from a business perspective: the majority of the football club revenues came from sponsors, who, at the time, were not receiving any value.

Football sponsors from the airline and hospitality industry felt the extreme impact of the pandemic. High-risk finance company Basset & Gold, a sponsor of West Ham, even went bankrupt, citing the pandemic.

Some sponsors cited “force majeure” to stop payments to the football clubs. “It's quite obvious that having no more events, everything has to be suspended, it seems so logical to me,” Marc Vanhove who runs the restaurant chain Bistro Regent, shirt-sponsor of Bordeaux FC, told Agence France-Presse.

PSG’s primary sponsor for the 2019-2020 game season, French hotel group Accor, was also evaluating backing out from paying the entire contract amount of around 50 million euros but ended up honoring it. [Keep reading on financemagnates.com]