By Paul Nicholson
May 30 – The European football business has never had it so good. Latest data from Deloittes puts the overall market value at a record €28.4 billion, driven primarily by a 6% rise in revenues across the increasingly dominant Big 5 European leagues and their ‘super’ clubs to €15.6 billion.
Even within the Big 5 there is an overpowering weighting towards the revenue-generating monster of the English Premier League and Football League whose revenues rose to €5.8bn, a massive 72% higher than their nearest competitor – Germany’s Bundesliga.
That the Bundesliga overtook the aggressively expansionist LaLiga as the second highest revenue generating football league in the world is worth comment in itself.
The Bundesliga is the best attended European league with average crowds of over 43,000 in 2018/19, but it’s revenue leap this year was boosted by the start of its new broadcast deal.
The figures are drawn from the 28th Annual Review of Football Finance from the Sports Business Group at Deloitte.
Dan Jones, partner and head of the Sports Business Group at Deloitte, said: “European club football is in the strongest financial position that we’ve ever seen. This reflects the drive among leading clubs to generate ever greater revenues to fund success on the pitch and also the sustained efforts of UEFA to improve profitability and sustainability of clubs through Financial Fair Play and club licensing.
“While the Premier League retains its leading position financially, we expect to see other leagues continue to grow in the coming years.”
Looking at the English leagues in particular the report highlights a 6% rise in Premier league revenues to $4.6 billion, helped by the increase in UEFA distributions to English clubs with five teams competing in the Champions League in 2017/18.
Even so, Premier League operating profits fell 16% to £867million in 2017/18, but still the second highest level of profitability ever;
Looking at the English second tier Championship, clubs combined revenues of £749 million were a record and a 4% increase on the previous year, though the crucial wages/revenue ratio of Championship clubs increased from 99% to 106%, “highlighting the increasing level of financial risk that Championship clubs are willing to take in order to chase promotion to the Premier League.”
Perhaps the happiest people of all will be the UK’s Inland Revenue service. English clubs paid £2.1 billion in taxes in 2017/18 ( vs 2016/17 taxes of £1.9 billion).
But there were words of warning from Deloittes over the need to control costs in the Championship and, inevitably, player wages.
“We have seen Premier League clubs’ wage expenditure increase at a faster rate than revenue growth in 2017/18. This is the same pattern as observed in the second year of the previous Premier League broadcast rights cycles, as clubs continue to invest in playing talent. This wage spending is an indication of the competitive nature of the division, with the top clubs competing for financially lucrative places in UEFA competitions, and clubs lower down the division fighting to remain in the Premier League itself.
“With the sale of the Premier League’s domestic and international broadcast rights now complete for the 2019/20-2021/22 seasons, resulting in an overall 8% revenue increase, Premier League clubs will receive further increases in central distributions in the coming seasons. However, the increase is not as significant as in the previous two cycles and therefore clubs will aim to improve their competitive and financial position through developing and growing other commercial revenue.”
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