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Lack of home games has financial implications for Sunderland during tough season

Without trivialising the severity of the current Covid-19 pandemic, here’s a look at the financial implications of the virus on Sunderland’s season.

Sunderland v Gillingham - Sky Bet League One Photo by Ian Horrocks/Sunderland AFC via Getty Images

Turn on the news and it’s impossible to get away from the horrific impacts of Covid-19 - it’s inescapable. The thousands of deaths are an incredibly upsetting and stark reminder of our own mortality as well as the fragility of humanity in general.

Stock markets have tumbled as people’s livelihoods are sacrificed in the hopeless pursuit of sudden stability. Businesses struggle to overcome an unprecedented level of global panic and those at the bottom of the pyramid are the pawns sacrificed in this manic game of real-life chess.

Society is being forced to change, and we will emerge from this tumultuous chapter of history scarred by the event.

Furthermore, a large part of our lives has also been put on hold as football continues to be postponed in the interests of public safety.

Coronavirus cases reach 253 in Russia Photo by Sefa Karacan/Anadolu Agency via Getty Images

For clubs lower down the league pyramid, arguably including ourselves, the inevitable question of financial health will raise its head at some point.

Earlier this season I argued for investment from the ownership team to restructure the club’s hierarchy, enhance its recruitment capabilities, and invest in its playing squad, but now the question turns away from speculation and instead focuses on security.

Barnet have put 60 of their non-playing staff on notice, Southend are struggling, and it is rumoured that clubs throughout League One and Two may struggle to play their employees over the course of the coming weeks.

A £50 million relief fund has been set up by the EFL, but worries will continue to mount as the weeks pass by because clubs are losing a big source of their income: matchday revenue.

Sunderland v Gillingham - Sky Bet League One Photo by Ian Horrocks/Sunderland AFC via Getty Images

Looking back at Sunderland’s last published financial results, it is clear to see that matchday revenue was on the decline. Dropping into the Championship, our matchday revenue fell from almost £9 million per year to around £6.6 million per year.

A drop in support was the main culprit as attendances plummeted by around a third, though that trend didn’t necessarily continue as we faced our first season in League One.

This year, with our final parachute payment calculated into the sum despite uncertainty lingering around its usage, the club are projected to generate somewhere close to £30 million turnover. However, with the loss of income associated with the sudden impact of Covid-19, the club might well be looking over their shoulder.

With 23 league home games and a handful of poorly attended cup ties in our Championship season, the club generated £6.6 million, which will likely be fairly similar to the figures for last season’s campaign in League One - especially after a decent cup run and play-off extras.

As such, somewhere around £6 million of income divided by 23 home games this season averages out to around £261,000 generated per home game in League One - using very crude means of calculations.

Sunderland still have Shrewsbury, Peterborough, Accrington Stanley, and potentially another game in the play-offs yet to play, which would theoretically equate to around £1 million of potential income hanging on the line.

Sunderland Unveil New Manager - Martin O’Neill Photo by Stu Forster/Getty Images

Although £1 million is something not to be sniffed at, Sunderland should hopefully be able to cope without that income at present. £1 million out of the £12-15 million set aside for player’s wages come out to around 6-8% of the club’s needs to pay players - it’s even less for overall operational running costs.

It is also worth nothing here that the owners’ decision to cut costs across the club -whether viewed as right or wrong - could well help the club in this situation.

While many have bemoaned a lack of transfer investment this season, the club’s decision to try to become more sustainable could well pay off somewhat should we continue to be without the potential £1 million still to receive in match revenue as well as cash generated via banqueting and hospitality during this time.

Although fans might point to a relatively low-key season on the pitch, the owners’ decision to cut the wage bill down to somewhere believed to be around £12-15 million per season could well help to provide some security for a side that has danced with financial doom for far too long.

Covid-19 has been an unprecedented disaster thus far, and it will continue to impact people’s lives moving forward. Once life returns to some semblance of normality, I hope we as a people understand the fragility of life.

In any moment our existence can be plucked from us in cruel circumstances. Only by banding together and supporting one-another can we overcome the biggest of obstacles.

Look after each other, people.