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Home truths
Annual Review of Football
Finance 2020
Sports Business Group
June 2020
A
Annual Review of Football Finance 2020 |
Section title goes here
The 2018/19 season saw English and
European football reach record levels
of revenue generation. This snapshot
of the peak before the impact of the
COVID-19 pandemic also includes
some warning signs for the challenges
to come.
B
Annual Review of Football Finance 2020 |
Contents
Contents
Foreword 02 Edited by
Dan Jones
Delivering results worldwide 05
Sub-editor
The leading team in the business of sport 06 Michael Barnard
Europe’s premier leagues 08 Authors
Theo Ajadi, Tom Ambler, Zal Udwadia and Chris Wood
Fans for the memories 14
Sports Business Group
Premier League clubs 16 Telephone: +44 (0)161 455 8787
PO Box 500, 2 Hardman Street, Manchester, M60 2AT, UK
The women’s game 22 E-mail: sportsteamuk@deloitte.co.uk
www.deloitte.co.uk/sportsbusinessgroup
Football League clubs 24
June 2020
Player transfers 28
Climate for change? 29
Common Goal – past, present and future 30
Please visit our website at
Stadia 31 www.deloitte.co.uk/arff to download a copy of the full report
and to purchase the Databook.
5G in football – a winning strategy 34
Our 40 page Databook includes over 8,000 data items on
the various topics covered in this report, prepared on the
basis of our specialist and long-established methodologies.
It is available to purchase for £1,000 from www.deloitte.co.uk/arff
01
Annual Review of Football Finance 2020 |
Foreword
Home truths
Welcome to the Annual Review of Football Finance 2020, the The commercial powerhouses of FC Barcelona I want it all
and Real Madrid, which delivered a Spanish one- Record revenues were accompanied by
publication that remains the most comprehensive analysis of two in the latest edition of the Deloitte Football increased disparity between the biggest and the
the financial trends in, and prospects for, the football industry. Money League, drove Spain’s La Liga revenues rest within the Premier League, with the average
ahead of those of its German counterpart, the revenue of the ‘big six’ clubs now at £500m, over
Bundesliga. three times that of the remaining clubs.
The 29th edition of this report is written at a Don’t stop me now
time like no other, set against the backdrop 2018/19 saw further revenue increases to The anticipated uplift of c.20% in value of La Wage cost growth outpaced revenue growth
of the ongoing COVID-19 pandemic which is record levels across each of the ‘big five’ Liga’s domestic and international broadcast for the second season in a row, increasing 11%
impacting all industries at every level. The world leagues, further growing the overall size of the rights agreements from 2019/20 had looked to over £3 billion for the first time, resulting in a
of elite football is no exception. European football market. Due to COVID-19, the set to ensure they remain the Premier League’s wages to revenue ratio of 61%.
next edition of this report will show a decrease nearest challenger, in revenue generation terms,
Whilst this report focuses on the finances in the scale of the market. as the English top-tier also entered a new rights In previous editions we have reported increased
of European football in the 2018/19 season, cycle. wage spending in the final year of a broadcast
completed ahead of the COVID-19 outbreak, Across Europe revenue growth was driven cycle, ahead of commencement of the Premier
we have sought to consider the impact on the by clubs in the ‘big five’ leagues receiving the Instead, by virtue of its earlier return to play League’s next bumper deal. This time, clubs
2019/20 season and those which follow. majority of a c.€700m increase in distributions and, uniquely amongst the ‘big five’, planned were aware that no large increases would follow
from UEFA club competitions, delivered through completion of matches by the end of June, the as they have in each of the two previous cycles,
It is a reflection of the importance of elite a raft of new broadcast arrangements for the Bundesliga will likely report higher revenues despite the increased value of international
European club football in many people’s lives cycle 2018/19 to 2020/21. than La Liga in 2019/20. La Liga is expected rights being set to deliver an incremental uplift
that for them the postponement of matches was to return to being Europe’s second highest to Premier League revenues.
one of the first clear signals of the seriousness Liverpool lifted the UEFA Champions League for revenue-generating league in 2020/21.
and ubiquitous impact of the pandemic on the sixth time, as a new distribution mechanism Clubs’ spending on playing talent, through
society. That importance to people, coupled favoured the biggest clubs, rewarding historical Despite recording double-digit revenue growth, wages and transfer fees, was already set to
with ongoing progress towards the return of performance and adding to polarisation across Italian and French top-tier clubs recorded reduce profitability in 2019/20, as it had in
football, gives us confidence that the industry and within the European game. operating losses. Italy’s revenue growth from 2018/19. The COVID-19 pandemic will have had
will thrive again in the future, despite the a new broadcast cycle was outpaced as wage a destructive impact on profitability in 2019/20,
seismic short-term shock in the spring of 2020. 2018/19 saw Premier League clubs’ revenue spending increased at the fastest rate of any as revenues fell dramatically and costs did not in
total over £5 billion for the first time, as the of the ‘big five’. Ligue 1’s record operating loss, the final quarter of the season.
revenue gap to La Liga and the Bundesliga was ahead of a now expunged season in 2019/20,
extended again, following a slight narrowing in gave particular cause for concern. The negative swing of almost £600m in 2018/19
the previous season. compared to 2017/18 saw previous hopes for
sustained pre-tax profitability shattered, with
02
Annual Review of Football Finance 2020 |
Foreword
clubs recording an aggregate loss of £165m, Broadcast and commercial revenue streams The trend, identified Hammer to fall
as player transfer profits fell and amortisation delivered 86% of ‘big five’ league revenues, in numerous At the start of the
charges grew as Premier League clubs invested and with the remaining 14% from matchday previous editions 2019/20 season, Bury
to strengthen squads. not available for the foreseeable future, clubs of this report, FC became the first
and leagues must do everything they can to continued as the Football League club
This result was not the responsibility of a small find ways to strengthen these relationships, spending behaviour of to go out of business
minority. Almost half of the Premier League’s and deliver value to their partners through EFL Championship clubs since Maidstone United’s
clubs recorded losses, delivering only the alternative content and activation. remained unsustainable liquidation in 1992. A number
second aggregate pre-tax loss in the past six without owner funding, with the of other clubs struggled through,
seasons. The previous example, in 2015/16 The strength of these relationships will be tested pursuit of promotion to the World’s richest supported from month to month by owner
(£115m), came ahead of a known near 50% under the current strain. There are substantial league continuing. For the fourth time in seven contributions. More rigorous and robustly
increase in domestic broadcast rights values for implications for the European football seasons, a record-breaking wages to revenue enforced regulation than the EFL’s existing
the following year. Not so on this occasion. landscape over the coming seasons, including ratio (107%) demonstrated the collective lack rules is required to force clubs to act more
potentially significant and lasting impacts on the of control. In no other industry would such a responsibly and save them from themselves to
It is clear that even before the onset of the financial strength of clubs and leagues. metric be viable, and whilst football benefits ensure this does not become commonplace.
COVID-19 pandemic there was some evidence from the desire of many to fund those losses,
of weakening cost control and profitability the impact of the pandemic on club owners’ Whilst COVID-19 has presented so many
among Premier League clubs. The sudden hit to I want to break free broader finances and business interests brings challenges to the global population and the
revenues will have compounded this and tipped A step below Europe’s elite, the finances of the question of long-term sustainability into football industry alike over the past three
many clubs into, or deeper into, a loss making the English Football League (‘EFL’) have been sharper focus than ever. months, it will inevitably provide opportunities
position overnight. thrust into the spotlight in recent weeks as the for change. And change is needed desperately,
COVID-19 outbreak has accentuated the losses, Across the rest of the EFL, League 1 and League both collectively, and in many cases individually,
Returning to action is clearly critical to limiting and cash flow difficulties, of Football League 2 clubs together reported record revenues for the good of the now 71 football league clubs.
the financial impact of the pandemic and clubs which have manifested themselves over a of £282m, driven by a change in club mix, as
leagues have now responded in different number of years. Sunderland played in the third tier for the first The commencement of a new broadcast rights
ways at different paces. The Bundesliga has time in over 30 years. Sunderland’s higher arrangement for 2019/20 has delivered a
returned to crowdless action and the Premier 2018/19 saw record revenues of £785m in the revenues aided a decreased wages to revenue c.35% increase in value on the previous deal,
League, La Liga and Serie A are all on the path Championship, as three established Premier ratio in League 1 (80%), whilst League 2 wage but nothing has suggested that this additional
to a resumption in mid-June, whilst the Ligue 1 League clubs relegated in 2017/18 returned to spending stabilised at 78% of revenues. revenue isn’t already wholly spent, and then
season was quickly expunged. the second-tier. These clubs also brought large, some, on playing talent. As such, this increase
though reduced from Premier League level, cost will have, unfortunately, done little to support
bases with them. EFL clubs which have lost their matchday
income over the past three months.
03
Annual Review of Football Finance 2020 |
Foreword
Deferrals and temporary wage cuts may be responsibility for clubs. We may well see shifts been harmed by the ravages of the pandemic.
applied to ease the short-term cash implications, in fan behaviour that impact the future of the Polarisation will be even more evident – for the
but in the long run more meaningful changes game in unpredictable ways. biggest clubs and competitions others will step
are likely, and required. A squad salary cap at forward and fill the breach, for many though
Championship level, if collectively driven and More so than ever, this period of crisis shows times will be tough.
enforced, could significantly reduce losses the huge positive impact that professional
rapidly with a financial benefit far in excess of football can have on wider society with the For fans, while for some the path back to the
any damage to the on-pitch competitiveness or activity of organisations like Common Goal, stadium may be slow and uncertain initially,
quality in the division. the use of club stadia to enhance healthcare the thirst to reconnect with friends, family and
capacity, anti-racism activities and Premier the rituals of the crowd on match day will pull
League players’ contribution to NHS Charities them back in their tens of thousands again as a
A kind of magic being clear examples. Stakeholders who work in welcome measure of normality.
The recent lockdown has highlighted the the football industry know more than ever the custodians of institutions that are older than
importance of live sport to so many, particularly incredible power and influence the sport holds The clubs will as ever be the magnets for this any of us, and that hopefully will outlive all of us.
that unbeatable experience of matchday. Whilst in society. activity, setting the stage upon which the Their response will determine whether this crisis
the revenue derived from match-going fans players will again have the chance to show is viewed in the future as the end of a golden
had become an ever smaller proportion of the their skills, and those talents will rightly reap age, or the beginning of a new, better, era.
total revenue of top-flight clubs, the period of The show must go on the biggest share of the financial rewards the
behind closed doors football that lies ahead In many ways everything has changed in the public’s interest generates. I would like to thank my colleagues, Henry Wong
looks set to reinforce the importance of fans, world of football finance since we started and all those from across the football community
without their presence in the stadium to create planning this year’s Annual Review of Football who have helped us compile this year’s report.
the atmosphere for both players and broadcast Finance, but fundamentally much has also Play the game By the time of our next edition we will hopefully
audiences to enjoy. stayed the same. The game of football will recover and thrive be looking forward to the delayed Euro 2020
and remain a great universal passion for the tournament and reflecting on the financial
This period also provides a new challenge for The absence of football from our screens, and world. Critical to how the finances of football impact of a football season like no other. Until
clubs in their relationships with fans – who its tentative return, has reinforced the public’s emerge from this extraordinary short-term then, stay safe and well and enjoy this edition.
cannot currently build their connection through love for it and hence broadcasters’ appetite shock will be the actions of the game’s business
the age-old matchday channels. for, and in some cases, dependence upon, it. leaders. Football has the potential to return Dan Jones, Partner
This in turn will continue to attract sponsor not only intact, but stronger and more resilient www.deloitte.co.uk/sportsbusinessgroup
The importance of being able to meaningfully and corporate interest, although the ability if the right lessons are learned and measures
connect with fans digitally has never been of many companies to fund the game to the are taken, perhaps collectively. The current
greater and presents an opportunity and degree they previously did – or at all – may have cohort of administrators and investors are the
04
Annual Review of Football Finance 2020 |
Sports Business Group
Delivering results worldwide
Deloitte has a unique focus on the sports sector, led from Strategy development Business planning
Assistance with the Business plan preparation
the UK and operating across the world. Our experience, development of brand, regarding the Rugby League
long-standing relationships and understanding of the business and go-to-market World Cup tournament’s
strategies for the league. broadcast and commercial
industry mean we bring valuable expertise to any project rights.
from day one.
Consulting services Market analysis and
Assistance to FIA and benchmarking
For more than a quarter of a century, across For further details on how Deloitte can add Formula 1 to support the Independent study on the
over 40 countries, we have worked with more value to your project and your business, development of the FIA economics of cricket, providing
organisations in sport than any other advisers. visit our website www.deloitte.co.uk/ F1 Financial Regulations the first comprehensive
Our specialist Sports Business Group at Deloitte sportsbusinessgroup and contact us on: and supporting regulatory analysis of the sport’s finances
provides services including: framework. in a global context.
Telephone: +44 (0)161 455 8787
•• Business planning Email: sportsteamuk@deloitte.co.uk
•• Revenue enhancement and cost control
•• Market analysis and benchmarking
•• Strategic review
•• Economic impact studies
•• Venue feasibility and development
•• Sports regulation advice
•• Due diligence
•• Corporate finance advisory
•• Business improvement and restructuring
•• Forensic and dispute services
•• Digital strategy and transformation
Deloitte are also audit and tax advisers to
many sports businesses.
05Annual Review of Football Finance 2020 |
Sports Business Group
The leading team in the business of sport
Improve your strategy and governance
Working together with our clients, We help deliver effective
Deloitte’s unique experience, governance, strategies,
insights, robust evidence-based operations, competitions and
advice, and credibility in sport impact analysis for sports
Business Economic impact Strategy Governance and Restructuring
Business Economic impact Strategy Governance and Restructuring helpsplanning
build a strong case and
studies organisations
review and to build their
organisational of competitions
planning studies review and organisational of competitions consensus for change amongst integrity, credibility,design
development quality, youthand calendar
development design and calendar
key stakeholders and enables player development, popularity
our clients to positively influence and value.
and react to their wider political,
economic and social environment.
Optimise your revenues
Deloitte bring experience, We give our clients a competitive
information, insights and leading advantage by delivering solutions
practices to help our clients to to help engage their fans, grow
analyse and grow their revenues attendances, promote their
and profitability. brand, build value from new Commercial Market analysis Ticketing and Benchmarking Media rights
Commercial Market analysis Ticketing and Benchmarking Media rights development and development hospitality and best practice analysis
development and development hospitality markets
and bestand accelerate
practice growth.
analysis strategies
strategies
06Annual Review of Football Finance 2020 |
Sports Business Group
Unlocking digital revenue
Commercial Market analysis Ticketing and Benchmarking Media rights
Deloitte help our clients move Deloitte focus on putting smaller,
development and development hospitality and best practice analysis
strategies beyond ad-hoc, siloed, digital more tightly scoped offerings
initiatives to createMarket
Commercial a coherent
analysis into theand
Ticketing marketBenchmarking
quickly and Media rights
development and development hospitality and best practice analysis
end-to-end transformation that successfully,
strategies to incrementally
Digital strategy Data Business agility Mobile and Content and combines emerging technology achieve a re-imagined business
and planning transformation and ways of e-commerce campaign and human-experience led ambition.
working implementation strategy
design.
Make informed investment decisions
Deloitte has an extensive track- We utilise our experience, industry
record of delivering tailored value- knowledge and global networks
adding Financial
Advice on the servicesand
to a wide range of
Business and to provide independent
Targeting, and
Major event
development of commercial venue market acquiring and feasibility, bid
investors,
stadia and other dueowners
diligenceandfeasibility
financiers studiestrusted advice
disposing of ato help our clients
support and
facilitiesin respect of various sports assets understand the commercial
sports business advisory services Advice on the Financial and Business and Targeting, Major event
around the world such as clubs realities of their proposed development of commercial venue market acquiring and feasibility, bid
stadia and other due diligence feasibility studies disposing of a support and
and sports marketing companies. investments, and plan successfully facilities sports business advisory services
for the future.
Ensure financial integrity
Deloitte brings to clients an Our clients benefit from our
unrivalled depth of understanding expert review, advice and reports
of sports’ regulatory requirements, to manage their risks, comply with
how the business of sport works in statutory requirements, resolve
Risk Audit and Club licensing Investigatory and Sports tax practice, and the wider economic, disputes, and implement effective
management compliance and cost control dispute services advisory accounting and legal environment sport regulations.
regulations
in which a sport operates.
Risk Audit and Club licensing Investigatory and Sports tax
management compliance and cost control dispute services advisory
regulations
07Annual Review of Football Finance 2020 |
Europe’s premier leagues
Europe’s premier leagues
In 2018/19, the commencement of the new three-year Chart 1: European football market size – 2017/18 and 2018/19 (€ billion)
broadcast cycle for UEFA club competitions drove growth in ‘Big five’ European leagues
2.7
European club football, although the challenge of revenue 4.2
15%
0.7
9%
0.7
Non ‘big five’ top leagues
2.9 ‘Big five’ countries’ other leagues
polarisation remains. 2.6
2%
10%
2%
FIFA, UEFA and National
9%
€28.4bn €28.9bn Associations
2017/18 15.6 2018/19
European football market Revenue increases, whilst benefitting all 55% 5.6 17.0 Non ‘big five’ other leagues
20% 59%
European football market revenue for the in absolute terms, have not resolved the 5.3
19%
2018/19 season totalled €28.9 billion. longstanding challenge of polarisation as
Source: Leagues; UEFA; FIFA;
This equates to 2% growth since 2017/18. relative gaps widen. Clubs from the ‘big five’ Deloitte analysis.
leagues benefited from 70% of the additional
Excluding the biennial impact of UEFA UEFA prize money distributions, amounting
and FIFA’s international tournaments, the to €483m, driving their share of the European excel, but the overall strength of the relationship reported. UEFA’s ability to ensure its member
European football market has grown every year football market to 59%. between revenue and on-pitch success in the associations’ clubs remain aligned will be critical
throughout the 21st century to date. European same direction is hard to resist. to the future direction and health of European
football remains incredibly popular, with the In an effort to help redress the balance, UEFA football.
value of broadcast rights soaring in recent years has responded with a new club competition Recent developments have further intensified
and fans’ interest higher than ever. Clearly, starting in 2021/22, the UEFA Europa the challenges facing football’s governing Alongside this, the continuing evolution, and
challenging times now lie ahead for European Conference League. bodies. Currently, the European competition associated perception, of UEFA’s financial
football and in future editions we may well be format beyond 2023/24 is yet to be agreed regulations will play a key part. Whilst it is likely
reporting a revenue decline. Nonetheless, in The self-fulfilling nature of polarisation has been and the possibility of a European Super UEFA will face increased scrutiny, the principles
the long-term the fundamentals of the public, well recorded, as the most successful teams on League to disrupt the status quo is regularly of ensuring sporting integrity should remain,
and hence corporate, appetite for elite football the pitch reap financial rewards in increased with all stakeholders having a responsibility to
remain strong and will help the industry revenue and invest in playing talent to further act accordingly.
overcome these challenges. strengthen on-pitch performance. This has been Clubs from the ‘big five’
seen again in the 2019/20 season as, for the first
leagues benefited from In the immediate term, UEFA has commenced
2018/19 growth was driven by the time since the introduction of the round of 16 in its sales process for the 2021/22-2023/24 rights
commencement of the new three-year 2003/04, all 16 of the clubs reaching the knock- 70% of the additional UEFA cycle. Early indications suggest impressive
broadcast cycle for UEFA club competitions. out stages of the UEFA Champions League play
prize money distributions, value uplifts in some key markets, although it
Substantial uplifts to media rights values meant their domestic football in a ‘big five’ league. The is acknowledged that sustaining this across all
almost €700m of additional prize money was correlation and causation is imperfect, as ‘big’ amounting to €483m. territories is likely to be challenging.
distributed to clubs through UEFA competitions. clubs can underperform and ‘smaller’ clubs can
08Annual Review of Football Finance 2020 |
Europe’s premier leagues
Spain’s La Liga saw strong growth during 8,000 2: ‘Big five’ European league clubs’ revenue – 2018/19 (€m)
Chart
Weathering the storm 2018/19 and pushed ahead of the German 5,851
Bundesliga to regain its position as the 6,000 Matchday
1,616
European football has been a huge success world’s second-highest revenue generating 28% Broadcasting
story in its ability to generate revenue football league. 3,459 3,375
Sponsorship/Commercial
4,000 3,345
growth, led by broadcast but supported by 59% 496 Other commercial
1,023 15% 2,495
30% 846 1,902 385
commercial and matchday revenues. 25% 751 415 20%
1,831 30% 22%
The impact of COVID-19 with all major ‘Big five’ European leagues’ revenues 2,000
776
54%
521
1,483
520 1,460
284 Note: Commercial revenue is not
901 201
44%
59%
leagues severely disrupted, or ended La Liga clubs reported revenue growth of over 13% 16% 16% 11%
47%
11%
disaggregated into ‘sponsorship’
prematurely, and the postponement of €300m (10%) in the 2018/19 season, the second 0 England Spain Germany Italy France and ‘other commercial’ for clubs in
Euro 2020, will mean 2019/20 will see a highest absolute growth amongst the ‘big five’ England, Spain and Italy.
Average revenue per club (€m)
marked reduction in revenues. leagues. Broadcast revenues continued to be
Source: Leagues; Deloitte analysis.
the primary driver as the league benefited from 293 169 186 125 95
While all will be impacted, those clubs uplifts to media rights and the clubs competing
Matchday
from smaller countries, typically with a in European competitions profited from Average match attendance
greater dependence on matchday increased UEFA distributions.
38,484 26,585 42,738 24,106 22,833 Broadcasting
revenues, risk being hit the hardest.
The expected quiet summer player Top flight Spanish clubs grew commercial Stadium utilisation (%) Sponsorship/Commercial
transfer window may also limit vital revenues by 7%. Within this, the extent of
additional funds as bigger traditional polarisation within top-level football leagues is 97 75 88 61 74
Other commercial
buying clubs have their own financial evident as FC Barcelona alone accounted for
challenges. A likely mixed picture on the 88% of the increase. The club benefitted from
timing and nature of the return of fans to changes to its licensing and merchandising that In Serie A and Ligue 1, strong revenue Juventus accounting for around half of Serie
stadia, economic weakness faced by saw a reduced reliance on third parties as more growth was noted, with 11% and 12% uplifts A’s commercial growth. In Ligue 1, Paris Saint-
broadcasters and commercial partners of its revenue generating functions operated respectively. As we see across the football Germain continues to dominate French football,
and even ongoing restrictions on in-house. industry, broadcast rights income continues generating almost half of the league’s non-
European travel suggest it could be a to be a critical factor in driving overall revenue broadcast revenue. This is one of the clearest
bumpy recovery. Having regained the status of the second-richest growth. In Italy, the start of a new three-year examples of polarisation across Europe’s
football league in 2017/18, the Bundesliga’s international media rights deal resulted ‘big five’ leagues.
In addition to appropriate government change in club mix for 2018/19, from promotion in broadcast revenues increasing by 11%.
support, necessary and justified to protect and relegation reduced matchday and French clubs generated an additional €110m The Premier League continues to generate
a sport which means so much to so many, commercial revenues, allowing La Liga to retake from broadcast income as club performance the highest revenues across the ‘big five’ (€5.9
it will be important that all stakeholders second place in revenue terms through its improved in UEFA competitions. billion). The 20 clubs’ combined revenue grew
play their part in this recovery. Solidarity superior growth. by 7%, driven by commercial revenue growth of
across all stakeholders as well as strong In Italy and France, growth was actually 9% and clubs competing in UEFA competitions
leadership and action individually will be Bundesliga clubs still achieved impressive achieved across all revenue streams. Similar to benefiting from increased distributions.
needed to ensure none of the rich revenue growth of €177m (6%) for the the situation in Spain, the primary drivers for
diversity European football has built over 2018/19 season, due to the uplift in broadcast matchday and commercial revenue growth were English clubs achieved the highest absolute
decades of history is lost. revenues (19%) as the league benefitted from individual clubs’ financial performance, most growth (€411m) amongst the ‘big five’ leagues,
a contractual annual domestic rights revenue notably in Italy with Internazionale accounting despite the 2018/19 season having been the
increase. for c.70% of matchday revenue growth and final year of their current broadcast cycle.
09Annual Review of Football Finance 2020 |
Europe’s premier leagues
The 2019/20 and 2020/21 financial years Spain Italy Chart 3: ‘Big five’ European league clubs’
will be directly impacted by COVID-19, Commencing in 2019/20, new domestic Under the leadership of a new President, Serie revenue – 2016/17 to 2020/21 (€ billion)
with lost, and deferred, revenue from broadcast rights agreements are set to deliver A has highlighted key priorities of increasing the
7.0
the 2019/20 season creating a ‘V-shaped’ an uplift of c.15% in centralised revenue for La international appeal of the Italian league and
6.2
recovery for many ‘big five’ leagues as fans’ Liga clubs. Alongside a five-year international potentially transforming it into an organisation 5.9
continuing desire to consume top level rights agreement, this may see the league’s with broadcasting capabilities, as it seeks to 6.0
5.4
5.3
football helps to drive recovery and future clubs achieve combined broadcast revenues in regain lost ground from competitors. 4.9
long term revenue growth. excess of c.€2 billion in the coming years.
5.0
Domestic and international broadcast rights
Following the move to a centralised rights agreements expire at the end of the 2020/21
England sales model in 2015/16, a clear objective of the season. Serie A is currently assessing its 4.0 3.7
3.4 3.3
2019/20 marks the first year of a new three-year league was to reduce the financial disparity options, which may include accessing private 3.2 3.2
2.9 3.3
broadcast cycle in England that was estimated between clubs. For 2018/19, La Liga has publicly equity investment and / or the creation of 3.0 3.0 3.1 2.7
2.8 2.5
to deliver a c.8% increase to broadcast heralded its ability to reduce the ratio of its own platform in partnership with a third 2.1
2.2 2.1 2.3
revenues. The growth is entirely driven by an central broadcast revenues between the top party, likely a non-traditional broadcaster that
2.0 1.9
increase in international rights values. A relative and bottom earning clubs from almost 8:1 in may also commit to underwriting revenue 1.6 1.7 1.7
lack of competitive intensity in the domestic 2014/15 to 3.5:1. This reduced disparity should commitments to clubs. The decisions taken by
broadcast market compared to previous cycles further help the attractiveness and value of the Serie A clubs and the successful execution of 1.0
causing these values to fall slightly. This should Spanish league. the chosen strategy will be key to the league’s Projected
be viewed in the context of having achieved ability to narrow the gap to Germany and Spain 0 16/17 17/18 18/19 19/20 20/21
over 150% growth across the previous two Germany in revenue terms.
cycles, however, maintaining close to those A key factor in the structure of the current England Spain France
levels should be viewed favourably. domestic media rights agreement in Germany France Germany Italy
is the step changes between seasons that Before the cancellation of the 2019/20 season,
Of particular interest was the entrance of provides Bundesliga clubs with incremental reducing polarisation within the league and Source: Leagues; Deloitte analysis.
Amazon into the market and its acquisition of increases to broadcast income between achieving future (likely international) revenue
two full game-weeks through each season from 2017/18 and 2020/21. growth continued to be key priorities for Ligue As normality returns, the French Football
2019/20. Whilst its broadcast product differed 1. Domestically, the broadcast rights for the League’s (LFP) focus will switch to international
minimally from traditional broadcasters, the The Bundesliga faces a challenging broadcast 2020/21-2023/24 seasons are sold, with French exposure. The LFP is considering renegotiating
introduction of concurrent broadcasting and rights market for its tender for the next cycle top-tier clubs collectively agreeing that the with the current international rights holder
staggered kick-off times generated a high level starting in 2021/22, and will be hoping to create additional revenues are to be distributed under following pressure from clubs which believe
of interest. Amazon has reported significant competition between potential media partners a new equal-share model. This distribution these rights are undervalued. The most
growth in its Prime subscription packages over that have suffered financially in recent months. model is forecast to generate an additional successful nine clubs are bullish on the long-
the period when Premier League matches In order to promote competitive tension and c.€20m for each club, which will at least help term growth of international rights, and a
were broadcast and we await with interest to entice new entrants to the market, the to mitigate the impact of the cessation of the pre-condition of agreeing to the equal split of
whether this will signal a more substantial move Bundesliga has implemented a “no exclusive 2019/20 season and consequent shortfall in additional domestic rights value was that future
to acquire rights by Amazon, or other similar owner rule”, requiring rights to be shared with broadcast revenue for that year. additional international broadcast revenues
organisations in the future. internet and media providers if the first four be shared between just those nine clubs. Only
packages of rights are acquired by one partner. the results of future rights sale processes will
demonstrate which faction got the better deal.
10Annual Review of Football Finance 2020 |
Europe’s premier leagues
Wage costs across the ‘big five’ leagues Germany Chart 4: ‘Big five’ European league clubs’ revenue and wage costs – 2017/18 and 2018/19 (€m)
increased by almost €1 billion as their Bundesliga clubs increased their wage
8,000
combined wages to revenue ratio expenditure by 7%. Despite top-tier German
increased to 63%. clubs benefitting from revenue growth during 5,851
the second year of a four-year domestic 6,000 5,440
broadcast cycle, the wages to revenue ratio
England actually rose slightly to 54%. Whilst this is the 3,375 3,345
4,000 3,073 3,168
Top-tier English clubs increased their wage spend highest level since the 2009/10 season it is 3,579
2,495
3,217 2,239
by 11% to €3.6 billion in 2018/19 season. As is worth noting that no other ‘big five’ league has 1,692 1,902
2,000 2,031 2,093
typical in the final year of the Premier League’s recorded as low a level as this in the past 1,674 1,798 1,757
1,487 1,262 1,389
broadcast rights cycle, wage growth outpaced 20 years.
revenue growth, resulting in an increase in the 0 17/18 18/19 17/18 18/19 17/18 18/19 17/18 18/19 17/18 18/19
wages to revenue ratio from 59% to 61%. An interesting trend across German football England Spain Germany Italy France
recently has been the approach of acquiring the Wages/revenue ratio (%)
In previous cycles, Premier League clubs were best young playing talent from other leagues
spending in the comforting knowledge of around the world. This has included both 59 61 66 62 53 54 66 70 75 73
contracted increased central distributions to players that have made a rapid impression in
Average club wages (€m)
come for the next three seasons. The fact this non ‘big five’ leagues and those denied first
was not the case in 2018/19 raises concerns team playing opportunities in other ‘big five’ 161 179 102 105 93 100 74 88 63 69
about the impact on overall levels of profitability leagues. Whilst in the short-term these players
for 2019/20 and beyond, even without any other may not demand the same level of wages as a Revenue Wage costs Source: Leagues; Deloitte analysis.
disruption. more established ‘star name’, it is likely that if
Bundesliga clubs wish to retain them through
Spain the peak of their careers, we will see inflationary Italy France
After three consecutive seasons of double-digit pressure on the wages to revenue ratio over Serie A clubs increased their wage expenditure After a period of intense transfer activity helped
wage growth, the increase in La Liga clubs’ time. The Bundesliga will look to counter that at the fastest rate of the ‘big five’ leagues in drive Ligue 1 clubs’ wage costs up by 10%,
wage expenditure was a much more modest by the development and longer-term retention 2018/19, and returned to a wages to revenue Paris Saint-Germain, Monaco, Olympique
3% for the 2018/19 season. This was driven by of the playing talent, assisting in achieving ratio of 70%, the UEFA guideline for a club’s Lyonnais and Olympique de Marseille were
a reduction in wage spend at Real Madrid (a the strategic objective of developing the financial health. again the top four biggest wage spenders,
decrease of €36.5m), due in part to the transfer competition’s international image and hence accounting for over half of the league’s total
of Cristiano Ronaldo to Juventus. Removing revenues. With Italian clubs seeking to improve their playing wage costs between them.
Real Madrid’s wage cost decrease reveals an talent through the transfer market, significant
underlying increase across the other 19 La Liga additions were made to playing squads and 11 of As Ligue 1 clubs benefitted from strong revenue
clubs of 6%. the 20 Serie A clubs reported a wages to revenue growth, the wages to revenue ratio reduced to
ratio in excess of 70%, compared to seven in 73%. However, this remains the highest wages
The wages to revenue ratio decreased to 62% the previous season. As the league’s clubs to revenue ratio across the ‘big five’ leagues.
in 2018/19, from a 15 year high in the previous continued to acquire playing talent to compete The broadcast rights uplifts secured from
season (66%). 2019/20 marks the start of a new at both domestic and European levels we the 2020/21 season may enable the wages to
broadcast cycle, bringing Spanish clubs further expect to see a further increase in the league’s revenue ratio to be reduced further in future
revenue growth and scope to further reduce wage spending and wages to revenue ratio in seasons.
the ratio in the coming years. the next edition of this report.
11Annual Review of Football Finance 2020 |
Europe’s premier leagues
The ‘big five’ leagues generated aggregated Spain Chart 5: ‘Big five’ European league clubs’ profitability – 2009/10 to 2018/19 (€m)
operating profits of €1.4 billion for the Spanish top-flight clubs achieved aggregated
1,250 UEFA FFP Start of FFP Start of break- Enhanced 1,208
2018/19 season, an increase of 7% on the operating profit of €445m for the 2018/19 regulations break-even even compliance version of FFP
prior year. season and, for the first time in the league’s first approved requirement monitoring regulations
history, no La Liga club reported an operating 1,000 979
934 England
loss. This is a remarkable position for Spain’s top
739 721
England flight clubs, especially given the financial picture
750
After a number of years in which we have of just a few years ago. Whilst the centralised 681
reported a trend of Premier League clubs sale of broadcast rights has undoubtedly 455 445 Spain
moving towards consistent operating profits, been a key factor, credit should also be given 500 397
347 373
316 343
2018/19 saw a decline in overall operating profit to the league’s regulatory environment, 264 284 394 Germany
250
190
to €934m as wages and other operating costs which monitors clubs’ spending and imposes 250 138 171 96 260 226
81 104
grew faster than revenue. restrictions if appropriate. 30 59
103 (3) (35) (40)
0 (102) (97) (67)
With centralised revenue unlikely to deliver Revenue uplifts are secured for the next (140) (36) Italy
(53) (98) (43)
(110) (133)
growth in operating profits over the rights cycle domestic media rights cycle, and the league has (149) (160) (143)
that commenced in 2019/20, the emphasis publicly stated a desire to reduce the central -250
(298) (306) France
more than ever is on individual clubs to distributions ratio between the top and bottom
consider ways in which they can develop their earning clubs. Twinned with a tight regulatory -500 09/10 10/11 11/12 12/13 13/14 14/15 15/16 16/17 17/18 18/19
own revenue and efficiently deliver operating environment, it is likely that sustained
profits. With Premier League clubs appearing in profitability can be achieved across La Liga in
recent years to have become more sustainable the long-term. Note: The operating result is the net of revenues less France
businesses, there is a risk that 2018/19 marks wage costs and other operating costs. The operating Ligue 1 clubs reported a record aggregate
result excludes player trading and certain exceptional
a turning point back towards clubs making Germany operating loss of €306m for the 2018/19
items. Aggregate operating results for Spanish clubs
operating losses even without external market Likewise in Germany, the implementation of the were not available prior to 2013/14. season, their 12th successive year of generating
shocks such as those faced in 2020. DFL’s licensing standards has created a strong combined losses.
regulatory environment and facilitated financial Source: Leagues; Deloitte analysis.
responsibility amongst Bundesliga clubs. In More positively, the new domestic broadcast
Spanish top-flight clubs 2018/19, clubs benefited from broadcast revenue cycle in 2020/21 is expected to generate
achieved aggregated growth and controlled overall expenditure. Increased investor interest in Italian football revenue uplifts of c.€400m. This, if combined
Consequently, clubs achieved a league record coupled with a more robust regulatory and with improved cost control rather than further
operating profit of €445m for high operating profit of almost €400m. governance approach could provide the wage increases, could provide an opportunity
the 2018/19 season and, for opportunity for a return to profitability, but it for Ligue 1 clubs to operate profitably and
Italy is undoubtedly a challenging time for Italian increase the investor appeal of top-tier French
the first time in the league’s After two successive seasons of operating football. Those responsible for the Italian game clubs.
history, no La Liga club profits, Serie A clubs generated a combined will need to consider carefully how best to
operating loss of €36m for the 2018/19 season. proceed for a successful future.
reported an operating loss. Despite revenue growth, the increase in wage
spending has led to a collective loss-making
position.
12Annual Review of Football Finance 2020 |
Europe’s premier leagues
1,000
Whilst 2018/19 saw growth across many Netherlands Chart 6: Selected other European league clubs’ revenue – 2018/19 (€m)
of Europe’s non ‘big-five’ leagues, the The 2018/19 season saw revenues increase by 752 748
800
impacts of COVID-19, particularly on those 20% across the Dutch Eredivisie clubs. This was 138 45 Matchday Sponsorship/Commercial
leagues with a higher reliance on matchday driven primarily by Ajax’s progression to the 230 Broadcasting Other commercial
594
revenue, will present a major challenge. Champions League semi-finals which earned 600 436 226
the club €79m from UEFA distributions. 440
384 38
400 106 344
Russia Portugal 191 115 256 240
232 198
The Russian Premier League (RPL) maintained The Primera Liga saw further revenue 49 73
140 101 68 146 145
its position as the sixth-richest football league, polarisation amongst its clubs, as the league 200 73 51 124
126 35 19 51
116 63 49 39 65 39
despite a revenue decline, in Euro terms, of achieved overall revenue growth of 2% to 52 89 104
64 89 37 69 16 51 19 43 36 20
€61m (8%). €440m. The top three clubs, S.L. Benfica, 0 Russia Turkey NetherlandsPortugal Belgium Austria Scotland Denmark Norway Sweden Poland
FC Porto and Sporting CP, drove growth through Average revenue per club (€m)
In order to deliver growth for future seasons, increased matchday revenues and distributions 47 42 33 24 22 21 20 14 9 9 8
the RPL entered into an agreement with from UEFA club competitions.
Wages/revenue ratio (%)
YouTube to distribute international rights
during 2019/20 via a paid-for membership. Belgium 70 79 57 75 49 63 65 64 58 71 74
Furthermore, the league is seeking to increase Jupiler Pro League clubs achieved revenue Number of clubs
the intensity of competition and entertainment growth of 16% to €344m. A key driver of growth
16 18 18 18 16 12 12 14 16 16 16
value by voting in favour of an expansion of the was broadcast revenue (up 32%) as Belgian
league to 18 teams. clubs benefited from an improved collective
performance in UEFA club competitions Note: This chart includes a sample of countries top-tier leagues analysed in this report. Central
Turkey compared to 2017/18. From 2020/21 broadcast ranking below fifth in terms of average top division distributions from the SPFL will be boosted by
club revenues for the most recent available financial
The Turkish Süper Lig reported limited revenue revenue growth is expected, as a new five- a new, long-term, domestic broadcast rights
information. Figures in respect of Norway, Poland,
growth of 2% in Euro terms over the period. year domestic and international rights deal is Portugal, Russia and Turkey relate to FY2018. Figures in agreement commencing in 2020/21, which is
Difficult economic conditions and turbulence in anticipated to deliver an increase of over 25% respect of Denmark and Sweden relate to the year to anticipated to deliver a c.20% increase on the
the Turkish Lira exchange rate both presented on the existing agreement. December 2019. The wages to revenue ratio in respect existing arrangement.
of Belgium is based on player payroll only.
growth challenges.
Austria Source: Leagues; Club accounts; UEFA; Deloitte analysis. Denmark, Poland, Norway and Sweden
Nonetheless, the twin impacts of a new The 2018/19 season marked significant growth In 2018/19 no club from Denmark, Poland,
broadcast cycle and matchday revenue for the Austrian Bundesliga, as the league Norway or Sweden qualified for the Champions
improvements helped maintain Turkey’s strong expanded the number of competing teams to League group stage, and the advent of the UEFA
financial ranking amongst European leagues. 12 and revenues grew by 45% to €256m. Scotland Europa Conference League therefore offers
Turkish clubs’ stadium redevelopment projects The commencement of the new broadcast The Scottish Premiership clubs’ revenues these clubs an additional opportunity to benefit
and the Turkish Football Federation’s use of cycle, starting in 2018/19 further drove growth. increased by 3% to £212m (€240m) in 2018/19. financially from a share of UEFA distributions.
initiatives, such as UEFA Grow, to increase Longer term growth has seemingly been The presence of both Old Firm clubs in the These leagues also continue to look to other
the country’s participation in football and secured as the existing broadcast rights holder UEFA Europa League helped to deliver overall sources of revenue to achieve growth. For
encourage families to attend Süper Lig matches has negotiated an option to extend its current matchday and commercial growth. Matchday example, the Danish Superliga has agreed a
have also helped strengthen performance. agreement for a reported c.20% increase in revenues, boosted by a fourth successive season new three-season broadcast rights deal from
annual revenues, from the 2022/23 season. of attendances growth, comprised 48% of total 2021/22 to 2023/24 and the Polish Ekstraklasa
revenue – the highest amongst the European launched its own OTT platform in 2019/20.
13Annual Review of Football Finance 2020 |
Sports Business Group
Fans for the memories
Fans – as the ultimate consumer of its product – will always
50%
watch live football
via streaming (i.e.
be a primary consideration for decision-makers in the web based solutions),
90%
football industry. The three revenue types by which the with the same
proportion watching via
industry’s income is categorised are all ultimately driven by attendance at matches.
fan consumption. It is fans who subscribe to television or
of fans surveyed still watch
streaming providers to watch the sport and provide broadcast live football via traditional Key finding:
revenue, fans that organisations partnering with football clubs linear broadcasts Traditional linear
(via satellite or cable broadcast therefore
and leagues wish to increase their profile with thus providing broadcasters). remains hugely important
commercial revenue, and fans directly providing matchday for live sport, backed by
considerable demand
revenue through their attendance. amongst fans.
The consumption demands of the fan in a post- To get a glimpse into the current viewpoint of
COVID-19 world will therefore be of paramount the football fan we conducted a global survey
importance and interest to the industry as it in early May 2020 of fans in over 30 countries.
consolidates, recovers and ultimately grows The responses provided notable insights both
in the face of the pandemic. An adaptation on how fans prefer to consume football and When fans were asked to rank their
of existing business models is likely in the several topical issues in the game which will methods of consumption by order of
short-term at least as the industry adjusts to undoubtedly continue to be discussed in the preference the results were particularly
competing in a behind-closed-doors scenario, coming year. telling. Attendance at matches received Key finding:
where the consumption preferences of fans the highest number of first preference There is still an insatiable
watching from home become even more critical. selections with 40%. The most selected appetite for live sport,
second and third preferences were live and despite significant
television and live streaming broadcasts, advances in broadcast
with highlights via television and and technology, from the
streaming the most common fourth and perspective of the fan,
fifth preferences respectively. nothing beats
being there.
14Annual Review of Football Finance 2020 |
Sports Business Group
56%
The preferred channels used to access
information about clubs, leagues and
players vary. Despite the proliferation
of social media over the past
Key finding: decade respondents still
Greater use of streaming used websites for clubs and Key finding: of respondees view the
for highlights than for leagues more than any Fans appear to be current competition
live football shows other channel. The most broadly supportive of formats at continental
The consumption methods for that different content common source for players the continental and and domestic level as
highlights are again still led by is viewed via different was their Instagram feed. domestic competition fit for purpose. 30%
traditional linear broadcasts media by the same formats currently in were neutral on the
with 72% of respondents consumers. operation. issue with only 14%
using this method, although a expressing negative
significantly higher proportion sentiment.
(60%) consume via streaming High profile official domestic
compared to live football. matches taking place in other
territories have become When asked about ‘Super League’ style
more prevalent, recent competitions the fans surveyed were mainly
examples being the disapproving of such formats which would
Of those fans that Italian Supercoppa and potentially match the largest, but not necessarily
streamed (either live or Spanish Supercopa in the current best on-pitch, clubs against each
highlights) the device Saudi Arabia. The fans other on a regular season basis. 57% of fans
most commonly used surveyed expressed posted negative sentiment with less than a
was the phone, with negative sentiment quarter (24%) supportive.
42% of fans that stream for this, with 57% 63% also disapproved of
using that method disapproving and only Key finding: the notion that these Key finding:
compared to around 17% expressing Whilst such offers from host competitions should The current domestic
25% for laptop and approval. cities and countries may be be ‘closed shop’ and continental calendars,
television. attractive to leagues and (i.e. no promotion/ coupled with the drama,
federations, especially in a post- relegation) to fluidity and jeopardy that
Key finding: COVID-19 scenario where cashflow guarantee that the promotion and relegation
As mobile technology challenges are commonplace, largest teams play provides appear to be
and video quality careful consideration should be each other much valued.
continues to evolve with given to the core consumers – each season.
the advancement of 5G the fans – when making these
the trend of phone as the decisions.
primary streaming device
looks set to continue.
15Annual Review of Football Finance 2020 |
Premier League clubs
Premier League clubs Into the valley
The huge disruption to the 2019/20 season The completion of the 2019/20 season in the
caused by COVID-19, with a quarter of the summer of 2020 could, surprisingly, prompt
season delayed until at least June and July a rebound to a new revenue record for the
and played behind closed doors, will trigger 2020/21 financial year, as it will effectively
the first ever drop in Premier League cover one and a quarter seasons. There are
As predicted in last year’s Chart 7: Premier League clubs’ revenues revenues. The fall is made up of two a number of inherent uncertainties in trying
2016/17-2020/21 (£m) elements – 1) revenue delayed until the to estimate the revenue levels for 2020/21
edition, Premier League following financial year when the final – the speed and scale of return of fans to
clubs’ total revenue exceeded 6,000
5,157
Projected
5,400 games are played (football accounting years stadiums, the easing of travel restrictions to
typically end in May or June) and much more facilitate UEFA competitions, the strength of
£5 billion for the first time in 5,000 4,556
4,819 1,425
28%
1,350
25%
seriously, 2) revenue permanently lost due broadcast and commercial partnerships
2018/19, an increase of 7% 1,168
26%
1,305
27%
4,300 to the impact of the pandemic. and most fundamentally the prevalence of
1,550 COVID-19 will all shape the outcome.
compared to the previous 4,000
3,049
36% 3,700
69% While much uncertainty remains, assuming
season. 2,768
61%
2,844
59%
59%
a completed 2019/20 season, we estimate It is highly likely that the first truly “new
3,000 revenue may fall to c.£4.3 billion (17% normal” set of financial results will not be
2,200
Revenue increased across all three streams with 51% reduction from 2018/19), with over £500m seen until the 2021/22 season, reflected in
the majority of growth in broadcast revenue. 2,000 now recognised in 2020/21 but almost the 2023 edition of the Annual Review of
Increased distributions from participation £500m lost to the sport. Football Finance.
in UEFA club competitions were received by
1,000
clubs as a new cycle of broadcast agreements 620 670 683 550 350
commenced and changes to the distribution 13% 14% 13%
13% 6% performance in UEFA competitions; and strong between them. Both clubs continue to seek
model adopted by UEFA for its Champions 0 16/17 17/18 18/19 19/20 20/21 performances by Premier League clubs in ways to utilise their stadiums on non-match
League and Europa League competitions became Average revenue per club (£m) UEFA competitions. Approximately 80% of the days, with 2019/20 seeing concerts at Anfield
effective. Commercial revenue grew faster than 228 241 258 215 270 increase in broadcast revenue was generated by for the first time since 2008 and Tottenham
broadcast revenue (9% compared to 7%), due to the four Premier League clubs that participated Hotspur Stadium hosting its first NFL fixtures.
the commencement of multiple new commercial Matchday Broadcasting Commercial in the 2018/19 Champions League, with
deals, particularly at the largest clubs. the winners Liverpool generating £264m in As expected, matchday revenue continues to be
Source: Deloitte analysis. broadcast revenue across all competitions, a the smallest component of total revenue and its
19% increase on the previous season. share of total revenue decreased marginally to
Premier League clubs’ revenue generated revenue growth of more than 10%. 13%. Nonetheless, most of the Premier League
Clubs’ total revenue increased by £338m The increase in broadcast revenue (£205m) Commercial revenue increases (£120m, 9%) clubs which also participated in the 2017/18
(7%) in 2018/19 taking average revenue per accounted for 61% of the total revenue increase. accounted for most of the remaining total season reported increases in matchday revenue
Premier League club to £258m, an increase The rise was predominantly driven by the revenue increase, with all bar four of the as the total edged up to a new record level
of £17m compared to 2017/18. Total revenue combination of the increased value of UEFA consistent Premier League clubs reporting for the League. Stadium utilisation was 97%,
increases to new club record levels were seen broadcast rights; a new UEFA distribution increases. The two Champions League finalists, further highlighting the limited scope for growth
at the majority of Premier League clubs. Aside mechanism, which introduced a coefficient Liverpool and Tottenham Hotspur, generated in matchday revenue without ticket price or
from newly promoted clubs, four other clubs ranking element based on a club’s historical over half of the total commercial growth capacity increases.
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