By  Bradfordtaylor on June 10, 2020, Soccer clubs top Turkey will return to June 12 after a three-month break during COVID-19, but the country’s football industry faces a bleak future as the fallout of the pandemic exacerbates its long-term financial concerns.

The industry was already struggling when the new corona virus officially arrived in Turkey on March 11. It suffered from financial difficulties and a decline in sporting success as a result of growing economic and administrative issues in recent years. When the Turkish Football Association (TFF) decided to resume league games behind closed doors, the news was met with vigorous objections, especially from club coaches and players, who see the resumption as premature. Still, money speaks.

The risk of financial collapse in a giant industry is seen as the main driver of the decision by TFF, who refused to join the basketball and volleyball federations to end their seasons. Despite a number of COVID-19 cases among players and club staff, TFF president Nihat Ozdemir has been determined to resume the Super League to complete the remaining eight games of the season. The lower First League follows after June 19 and three minor leagues next month. About 200 teams will be back on the field for a game that often gets players in close contact, despite social distance rules.

As of June 10, Turkey ranked 11th in the world in the number of cases of COVID-19, which totaled more than 173,000, including over 4,700 fatalities. Officials reported 922 new cases and 17 deaths for the day. Ankara maintains that the pandemic is greatly under control to benefit from infections in infections. Eager to revive the shrinking economy, the government severely relaxed corporate and travel restrictions on June 1 amid persistent concerns that the reopening could trigger a second wave of contagion.

While the 18-team Super League will resume without spectators, Digiturk, the Qatari-owned TV station that holds the league’s broadcast rights, will air the matches and generate revenue from subscriptions.

Among Europe’s heavyweights, the English, Spanish and Italian leagues are scheduled to resume without spectators this month, while the German already started in mid-May. The Netherlands and France chose to end their seasons after the pandemic hit, and crowned the current leaders as champions.

The COVID-19 crisis has had a costly impact on the football industry globally, postponing the Euro 2020 championship and disrupting national leagues. Economic losses have been extended to nearby service sectors, mainly tourism when overseas travel became impossible.

In the football industry, the pandemic has dried up various cash flows, from sales of tickets and branded products to advertising, media and sponsorship revenue. However, the most decisive loss has been from the end of the live broadcast. In the world’s “Five Big” – Britain, Spain, Germany, Italy and France – losses are estimated to amount to up to EUR 4 billion ($ 4.5 billion), with the English Premier League losing only EUR 1.25 billion (1, $ 4 billion)). In another financial blow to the clubs, the transfer value of the players has dropped. The losses of the European football industry are estimated to have hit almost € 5 billion ($ 5.7 billion) and are likely to grow further. The much-feared risk of a second wave of infection threatens to cause unbearable damage to the industry.

Turkey’s football industry is even more difficult because it already had a financial crisis before the pandemic. Turkey’s financial turmoil since 2018, marked by the dramatic write-down of the Turkish lira, had damaged football clubs and companies, which made them unable to pay their debts.

As in other sectors, much of the football industry’s problems stem from the decline of the lira, which has led to an increase in foreign exchange prices and thus aggravated liabilities in hard currency. In the years before the crisis, when hard currency was cheap, Turkey’s top clubs rushed to attract foreign stars as the limit for foreign players was raised. The local players’ contracts were also often linked to hard currency. In 2018, the market value of the Super League reached $ 600 million and climbed to the top seven in Europe. Although quite modest compared to counterparts worth nearly $ 8.3 billion in England and $ 5.2 billion in Spain, it belonged to a time of cheap hard currency and was not sustainable for Turkey.

And after the lira began to sniff in mid-2018, the football industry found itself saddled by crushing hard currency burdens that dwarfed its limited hard currency earnings. Although the clubs sold some star players, their currency gaps remained unmanageable. The increase in interest rates on the lira in mid-2018, aimed at curbing the currency depreciation, increased the clubs’ problems. According to sports writer Tugrul Aksar, the clubs’ debts hit LK 14.5 billion in 2018, while their revenues amounted to only LK 3.5 billion.

When the pandemic hit, the financial profile of Turkey’s football industry amounted to LK 4.5 billion in revenues, LK 15 billion in debt, LK 5 billion in cumulative losses and a capital capital gap of almost LK 6 billion. The closure since March is estimated to have caused 1.5 billion pounds in losses to the Super League clubs. In other words, the loss of the football industry in three months amounts to about 30% of its annual revenue.

The effects of economic fragility, exacerbated by the pandemic, are already manifesting. On June 3, Trabzonspor, the current Super League leaders, released a ban on a season of European Championships for violating financial rules agreed with UEFA, the governing body of European football.

Overall, the clubs are likely to be more desperate for financial and financial support from the government. And even if they manage to interfere during the current season, the big question remains whether football will return to its old ego in packed stadiums or become entertainment solely watching TV.{jcomments on}

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