Ligue 1 being cancelled has raised questions on if the other four leagues will still return this season. In my most recent post, I had summarized my findings from various sources on when football could return. Given the lack of sources anticipating that Ligue 1 would be cancelled - the cancellation of French football until September has come as a bit of a shock.
I had clearly been wrong in my estimates, but this proves the point also mentioned in this post that 'There are so many variables to consider when estimating when the various leagues will return and there are factors which could influence decisions which are currently unknown to us.'
One of those unknown factors influencing the other four leagues return now may be the increased pressure to follow Ligue 1 in cancelling games until September.
Will the other four leagues return?
Ligue 1 being cancelled may cause more pressure on other leagues to follow suit in cancelling the season until September. Furthermore, various pundits, players and fans have expressed concerns towards football returning and this could prevent a return.
Ultimately, Ligue 1 being cancelled has proved how leagues are willing to sacrifice broadcasting revenues to ensure the safety of people. However, as explained below, the financial implications for Ligue 1 being cancelled differ to that of the other four leagues.
Below is an update on the four other PB eligible leagues:
Some teams are currently in training. The Premier League will hold further talks this Friday with 'Project Restart' hoping to see football return in June.
Teams are allowed to train from May 18th with a view to football games returning in June
Teams have been training for weeks now. The Bundesliga is ready to return on May 9th if the German government gives it the green light.
Players are returning to individual training sessions on May 4 and training sessions in club centers will be allowed from May 11. We could see a return in June.
Money is undoubtedly going to have a huge influence on football returning and it is interesting to see how Ligue 1 earns the least in revenue of all 5 PB eligible leagues from match days, broadcasting and sponsorship / commercial deals.
What is also interesting about Ligue 1 being cancelled is that they are the only country of the 5 above who's next significant broadcasting rights increase comes into effect from the 2020/2021 season.
As we can see Ligue 1's broadcasting revenue is currently the lowest of all 5 leagues, but as from next season Ligue 1's 'domestic rights values are set to increase by over 55%, to around €1.2 billion per season, greater than the current domestic rights value of Serie A (€1 billion) and similar to the domestic rights fees currently received by La Liga.' (Deloitte Annual Review of Football Fincance'.
Of course health is going to be a huge consideration impacting when football will return, but it certainly appears that the economic implications of football returning this season are greater for the other four leagues than they are for Ligue 1.
Ligue 1 players drop in price on Football Index
'Buy the dip' is what many traders often suggest doing. Usually this would be wise, but given the dips have not actually been very considerable in Ligue 1 players, mostly due to the wide spreads - it may not be worth taking advantage of these small dips in players who may not rise much for many months to come.
If a Ligue 1 player has recently dropped that you would have intended to hold long term anyway, of course now is a great opportunity to buy on a small discount. But, arguably money could be used better by spending on players who could rise over the next 2/3 months as opportunities in the market arise.
Ligue 1 teams financially vulnerable?
Some Ligue 1 players could now be even more susceptible to being poached by stronger teams as some teams will lose out on a lot of revenue for the rest of the season. Strong players for teams at financially vulnerable clubs could be worth considering, especially if they have less than 18 months left on their contract.
Lyon and PSG look set to continue to play in the Champions League which will generate further broadcasting revenue for both sides.
Wages for Ligue 1 players in recent years have also been much lower than the other 4 leagues, which again suggests they are better poised to deal, financially, with the cancellation in football.
However, the fact that Ligue 1 has the highest wages to revenue ratio (75%) further reinforces that some Ligue 1 teams may need to offload some players. A wages to revenue ratio of 70% is the benchmark for sustainability.
*The wages to revenue ratio is the percentage of a club's revenue that is spent on wages.
So to conclude, the fact that Ligue 1 has been cancelled may not bear as much influence on the other 4 leagues as one may originally think because as we can see, the context when it comes to finances and the economic implications of cancellation differ greatly between leagues.
There is still a lot of uncertainty around when the leagues will return and so we will have to wait and see what happens in Friday's meeting on the Premier League, but from a Football Index point of view - hopefully football will return sooner rather than later.
*A lot of the content in this blog was found using the Annual Review of Football Finance 2019 and more information on this can be found here: https://www2.deloitte.com/uk/en/pages/sports-business-group/articles/annual-review-of-football-finance.html
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