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Siya Special

Economic Landscape: Who The Biggest Losers Could Be

Will it be the players? That’s very likely – they have to hope that club owners are transparent and that the SA Football Players’ Union keeps to their promise to fight for their rights. Now could be the most crucial per­iod.

Ashraf Mohamed, a fund man­ager from Sycamore Capital, gave his insight into the possible effects that COVID-19 could have on sports sponsorship deals, indicating that the virus could hurt clubs over the next two to three years, and thus the players and employees who will struggle to meet wage bill demands.

"The move to halt all sporting events due to the Coronavirus has put sponsorship deals under the spotlight. Many of the sponsorship agreements are usually signed for three to five years with the sporting body, like the PSL, promising that a tournament or league will take place," Mohamed explained.

And although the PSL has indi­cated that they will want to try and conclude this season by June 30, the fund manager believes that the sea­son could be stretched out even fur­ther.

"With soccer unlikely to be played until July/August this year, we be­lieve that the sponsors will ask for a reduction in the amount that they must pay or insist that their brand must be used for another year with­out any cash being paid,” added Mohamed.

"This will hurt both the PSL and the clubs as they depend on spon­sorship to cover their costs. The im­pact will be that the clubs may ask their players to take salary cuts, as has happened in Italy and Spain. Be­cause the sponsors will suffer a fall in profits over the next year, they may decide to reduce the amount of the sponsorship in the future. While it will not have a long-term impact on soccer, the Coronavirus will hurt profits earned by the clubs over the next two to three years."

READ ON: Watch This Space: COVID-19: PSL club bosses fear economic collapse! 

In this 10 article Siya special:

1)  COVID-19: PSL Club Bosses Fear Economic Collapse! 

2) First Glance, Clubs Are Safe…For Now

3) The Big Question: Impact On Sponsorship Deals

4) Does The PSL Have A Contingency Plan?

5) Which Clubs Could Be The Hardest Hit?

6)  The Wheel Needs To Keep Spinning – Kadodia

7) The Industry Will Collapse – Comitis

8) There Is A Deficit In TV Coverage – Matthews

9) Economic Landscape: Who The Biggest Losers Could Be

10) Watch This Space: COVID-19: PSL club bosses fear economic collapse! 


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