Premier League clubs are set to face a £1 billion reduction in their 2019-20 revenues due to the coronavirus pandemic, research from financial firm Deloitte has found.
England's top-flight, which is set to resume behind closed doors on June 17, faces a significant financial challenge and operating losses after clubs posted a record £5bn in revenues last season.
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The financial firm's research showed that Europe's five major top-flight leagues in England, Spain, France, Italy and Germany generated a record £15bn in revenue last season, but that the interruptions caused by the virus would greatly impact this year's revenues.
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Deloitte said that half of the Premier League's reduction in revenue, due to rebates to broadcasters and a loss of matchday revenue, will be "permanently lost." The remaining £500 million will likely be deferred, depending on the go ahead of the 2021-22 season.
The firm also said clubs should introduce an internal salary cap based on 70% of their revenue to ensure their long-term future.
"You've got 107% of revenue going out on wages. You can see the problem looming," Deloitte's Dan Jones said in a statement.
"A salary cap is a blunt instrument, but if you can only spend 70% of revenue on salary, and applied that in 2018-19, you take £300m out of the wage bill and wipe out the losses."
Last month, Manchester United executive vice-chairman Ed Woodward said that the club is facing one of the most challenging periods in the club's history because of the pandemic. The comments came after United's third-quarter financial results revealed debt increased 42.2% to £429m.
Source: espn.co.uk