Domestic Sport
19:55 26 April 2020
Post by: WBJ

Sports clubs in critical financial condition

Sports clubs in critical financial condition
Source: Newseria

The coronavirus pandemic has put sports clubs in a difficult position. Lack of current receipts and cuts from TV stations and sponsors means that they are unable to meet their obligations, especially towards players. This can mean, at least in the short term, large pay cuts, even for the best players.

According to Grzegorz Kita, president of Sport Management Polska, in the long run, however, the sport may prove to be an antidote to the global economic and financial crisis, so sponsors' money may begin to flow in a wider stream.

“Sports clubs disconnected from the current drip not only of the matchday proceeds but probably also the broadcasting and sponsorship proceeds, are in a very difficult situation, in fact, they are standing and even lying against the wall. Further development of this market is multi-variant. We are aware that if the club does not earn, it cannot fulfill its current obligations, especially contractual obligations, towards players. Therefore, there is a compulsion to reduce competition contracts,” Kita said.

Some sportsmen, especially those practicing individual sports, have found themselves in a difficult financial situation, and some may not even return to professional sports. The players are in a better position, although they also earn much less. Some of them decided to give up their salary, some clubs decided to freeze some funds and reduce salaries by up to 70 percent. Also in Poland, clubs reduce their salaries, especially because it is enabled by the decision of the Ekstraklasa supervisory board.

“We are dealing with an emergency situation, so no one knows the patterns of how it should work, and there are no ready solutions. The biggest problem is cash flow. Temporary but radical reductions in player contracts on a scale of 50-80 percent for a few months, it is no longer goodwill or topic for discussion, only a sine qua non condition for the survival of many sports clubs,” Kita added

He emphasizes that there are even more far-reaching examples. The players and coach of the first team of Juventus Turin, as a support for the club, gave up their salary for March, April, May and June 2020. This will save the club around €90 million.

(WBJ)

clubs
coronavirus
sport management polska
grzegorz kita
sport

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