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Roar power
Annual Review of Football
Finance 2018
Sports Business Group
June 2018
A
Annual Review of Football Finance 2017 |
Section title goes here
The financial results for the 2016/17
season may well be viewed in the future
as the defining moment in the delivery
of sustained profitability by football clubs
competing in the Premier League.
B
Annual Review of Football Finance 2018 |
Contents
Contents
Foreword 02 Edited by
Dan Jones
Delivering results worldwide 04
Sub-editors
The leading team in the business of sport 06 Timothy Bridge, Matthew Green
Europe’s premier leagues 08 Authors
Michael Barnard, Matt Dwyer, Jake Wilson
Deloitte Football Intelligence Tool 14 and Christopher Winn
Premier League clubs 16 Sports Business Group
Telephone: +44 (0)161 455 8787
Under my umbrella 22 PO Box 500, 2 Hardman Street, Manchester, M60 2AT, UK
E-mail: sportsteamuk@deloitte.co.uk
Finding the leading edge 23 www.deloitte.co.uk/sportsbusinessgroup
Football League clubs 24 June 2018
Player transfers 28
Fields of dreams 29
Stadia 30
Please visit our website at
Moore’s Law 32 www.deloitte.co.uk/arff to download a copy of the full report
and to purchase the Databook.
Our 32 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 2018 |
Foreword
Roar power
Welcome to the Annual Review of Football Finance 2018, the Top level football and the live, unscripted drama league clubs entering insolvency proceedings
it delivers, remains the premium content that for over five years and our consistent reporting
publication that remains the most comprehensive analysis of broadcasters wish to acquire and amid changing of improved financial stability and profitability
the financial trends in, and prospects for, the football industry. consumer habits and fragmentation that are for that period, we hope that the developing
impacting the entire entertainment industry, financial maturity of the football industry will
the Premier League has once again shown its soon be more widely recognised.
This 27th edition follows a similar structure decade ago when 60% of the Premier League’s resilience and strength by retaining the vast
to previous years in outlining the key clubs were making operating losses and the vast majority of its audience and value. Indeed, once This new era of profitability alongside the high
developments across European football, but majority of any revenue increases were being the sales process for the remaining domestic quality of football strengthens the opportunity
the storyline that flows through has changed paid out in wages, prompting concerns over and international rights is completed, we expect for the Premier League and its clubs to have a
somewhat. The phenomenal growth of the long-term financial sustainability. the league will have delivered overall increases huge influence upon their local communities
English Premier League, capped by its financial in television revenue. and more widely around the world. The Premier
record breaking 2016/17 season, seems to Whilst the impact of the record broadcasting League currently supports not only the 20
have at last delivered a consistently profitable arrangements for the Premier League cannot be Whilst the ‘big six’ tighten their grip on the top clubs but also the 72 Football League and 68
picture for top tier clubs and more signs of underestimated and the increase in rights value of the table, on any given weekend the matches National League clubs to deliver community
long-term financial sustainability for those in the across the past two cycles is the primary factor remain as competitive and exciting as ever. This programmes, which have been praised for the
Football League. behind the growth in revenue, the benefit to was demonstrated by the fact that the leading impact they make.
clubs’ finances of operating in an appropriately revenue generating club in world football,
regulated environment, via UEFA Financial Manchester United, were defeated by all three Continued growth will further boost the
King of the jungle Fair Play regulations and the Premier League’s promoted clubs during the 2017/18 season. It is financial contribution to deliver high-class
The financial results for the 2016/17 season fully cost control measures is equally evident. The this unpredictability that appeals so strongly to football facilities in communities and schools,
affirmed the English Premier League’s position financial position of the clubs competing in the broadcasters and other commercial partners. whilst promoting the connection between the
as the market leader, with record revenue Premier League on a consistent basis currently Premier League and future fans for the long-
generated of £4.5 billion, as every one of the 20 suggests that profitable performance and The combination of financial success and stability, term benefits of the clubs themselves and the
clubs set their own personal annual revenue strengthening balance sheets, that looked so and the global popularity of the competition reputation of the competition.
record. impossible a decade ago, are now the norm. makes the Premier League an increasingly
attractive asset to investors, offering a financial
With revenue growth outpacing the growth in The recent announcement that the Premier return alongside the thrill and excitement of You got to put your behind in your past
the wage bill, no clubs reported an operating League’s domestic rights selling process for owning a major football club. Nonetheless, we Below the Premier League, the desire of clubs
loss and only one reported a wages/revenue 2019/20 – 2021/22 did not deliver the uplift that still sense in the market a hesitance amongst competing in the Championship to benefit from
ratio above the UEFA guideline for a club’s followers have become accustomed to over traditional financial institutions to accept that the potential financial windfall of promotion
financial health of 70%. It is a far cry from a recent years should not be a cause for concern. the landscape has changed. With no football remains unwavering. Whilst the Championship
02Annual Review of Football Finance 2018 |
Foreword
those in receipt, and those not, of parachute Germany’s Bundesliga will see growth The circle of life
payments. The key concern remains that from 2017/18 as a result of new broadcast I’d like to thank all of those that have
financial disparity will in the future translate to arrangements but their opportunity to close contributed to this year’s edition of the Annual
more predictable on-pitch performances. If this the gap on the Premier League may well rely Review of Football Finance from across the
were to become the case, then it may well be on their, and their clubs’, ability to innovate football world and to say thanks to all former
less attractive for many Championship clubs to and have the first mover advantage as new colleagues who have made it such a huge
push for promotion in the future. Championship revenue generating opportunities arise. This success in the past and now work in a variety of
club owners will doubtless be heartened by the will be particularly crucial given the recent exciting roles across the sports industry. I am
success of clubs such as Burnley, Bournemouth announcement that German clubs voted against very grateful to my colleagues who have written
and Huddersfield in securing and retaining any changes to the 50+1 ownership model that this year’s edition and Henry Wong for his
“This new era of profitability Premier League status. Notably, the 2017/18 effectively retains fan control and rules out design expertise.
alongside the high quality season saw no ‘yo-yo’ effect among either the
promoted or relegated clubs from 2016/17.
the significant owner investment seen in other
countries. Deloitte is proud to support the Green Ribbon
of football strengthens the Campaign, helping to #endthestigma of mental
opportunity for the Premier Further down the English football pyramid,
League 1 and League 2 are together financially Being brave doesn’t mean you go looking
health, an issue that impacts the football
community in the same way as any other.
League and its clubs to have bigger than ever before and comfortably the for trouble
a huge influence upon their biggest leagues at that level anywhere in the
world. The cost control measures that have
Changes to both the financial distribution
mechanism and the format of the qualification
We hope you enjoy this edition.
local communities and more been implemented by the Football League are process for the UEFA Champions League from Dan Jones, Partner
widely around the world.“ a further clear example of the positive impact
that financial regulations can have.
2018/19 will alter the footballing landscape in
Europe slightly but the rumoured FIFA led wider
www.deloitte.co.uk/sportsbusinessgroup
changes in global club football could have a
much more significant impact.
is the biggest second tier competition in world You can either run from it, or learn from it
football, generating more revenue than it ever More widely, whilst growth was achieved across Such change to the structure of club football
has before, club owners and management all of Europe’s ‘big five’ leagues, none of the requires careful consideration and detailed
have on the whole taken the decision to stretch Premier League’s competitors could match the assessment by football’s governing bodies,
themselves financially to gain promotion and pace, and the challenge now rests with them as whilst the initial financial boost of a new
this is the driver of the traditionally significant to try and close the gap, in revenue terms, in tournament or format could be substantial, the
operating losses and high wages to revenue ratio. the coming years. Spain’s La Liga is already long term popularity and sustainability of the
benefitting from its move to collective rights current calendar should not be undervalued.
The operating losses of the Championship are selling and has publicly stated its ambition and The development of football in the future
once again at record levels, in part driven by intent to significantly increase broadcasting remains something that we are excited to track.
the financial results of Newcastle United, who revenue. We expect that Spain will see the We hope to continue to make the Deloitte
maintained a wage bill comparable with Premier fastest rate of revenue growth in the next Annual Review of Football Finance a guide on
League clubs. At a revenue level, the Premier few years and with the tight financial controls that journey.
League broadcast arrangements have also that Spanish clubs now operate under, we’d
impacted the Championship with there now expect that this will also translate to continued
being a more significant differentiation between profitability.
03Annual Review of Football Finance 2018 |
Sports Business Group
Delivering results worldwide
Deloitte has a unique focus on the sports sector, led from Various strategic projects Economic impact study
the UK and operating across the world. Our experience, Continuing assistance to the Assessment of the Economic
British Olympic Association Impact of the Irish Breeding
long-standing relationships and understanding of the through to the Tokyo Olympic and Racing Industry.
industry mean we bring valuable expertise to any project Games 2020.
from day one.
For more than a quarter of a century, across Deloitte are also audit and tax advisers to many Consulting services Strategic business plan
over 40 countries, we have worked with more sports businesses. Assistance to the Association Support in the development of
organisations in sport than any other advisers. of Tennis Professionals across the strategic plan for the club’s
Our specialist Sports Business Group at Deloitte For further details on how Deloitte can add a range of strategic topics. inaugural Indian Super League
provides: value to your project and your business, season and long term future.
visit our website www.deloitte.co.uk/
• Business planning sportsbusinessgroup
• Revenue enhancement and cost control
• Market analysis and benchmarking Telephone: +44 (0)161 455 8787 Business plan development Strategic plan
• Strategic review Email: sportsteamuk@deloitte.co.uk Development of a strategic Assistance in the creation of a
• Economic impact studies business plan for the six year strategic plan.
• Venue feasibility and development services developing sport of Power
• Sports regulation advice Hockey.
• Due diligence
• Corporate finance advisory
• Business improvement and restructuring
• Forensic and dispute services
04Annual Review of Football Finance 2018 |
Sports Business Group
05Annual Review of Football Finance 2018 |
Sports Business Group
The leading team in the business of sport
Improve your strategy
and governance
Working together with our clients,
Deloitte’s unique experience,
Optimise your revenues
insights, robust evidence-based Business
planning
advice, and credibility in sport
Deloitte bring experience,
helps build a strong case and Strategy review
and development
information, insights and
consensus for change amongst
leading practices to help our
key stakeholders and enables
clients to analyse and grow
our clients to positively influence
their revenues and profitability.
and react to their wider political, Economic impact Commercial
economic and social environment. studies development
Market analysis We give our clients a
Governance and and development
competitive advantage by
We help deliver effective organisational
design delivering solutions to help
governance, strategies,
engage their fans, grow
competitions and impact analysis
attendances, promote their
for sports organisations to build Restructuring of Benchmarking
competitions and and best brand, build value
their integrity, credibility, quality, Ticketing and
calendar hospitality
practice from new markets and
youth player development,
strategies accelerate growth.
popularity and value.
Media rights analysis
06Annual Review of Football Finance 2018 |
Sports Business Group
Make informed investment
decisions
Deloitte has an extensive track- Advice on the
record of delivering tailored added- development of
stadia and other
Ensure financial integrity
value services to a wide range of
facilities Business and
investors, owners and financiers venue market Deloitte brings to clients an
in respect of various sports assets feasibility studies
unrivalled deep understanding
around the world such as clubs
of sports’ regulatory
and sports marketing companies.
Financial and requirements, how the business
commercial due of sport works in practice, and
We utilise our experience, industry diligence Audit and
Targeting and compliance the wider economic, accounting
knowledge and global networks
acquiring a
Risk management and legal environment in which
to provide independent and sports business
a sport operates.
trusted advice to help our clients
understand the commercial
Disposing of a Our clients benefit from our
realities of their proposed sports business Club licensing expert review, advice and
investments, and plan successfully and cost control reports to manage their
for the future. regulations
Investigatory risks, comply with statutory
and dispute requirements, resolve disputes,
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and implement effective
sport regulations.
Sports tax advisory
07Annual Review of Football Finance 2018 |
Europe’s premier leagues
Europe’s premier leagues
Strong growth in broadcasting rights Chart 1: European football market size – 2015/16 and 2016/17 (€ billion)
values across European football’s biggest UEFA distributions
domestic and continental competitions
drove total European football market 2.4
Distributions to clubs for participation in UEFA club
3.1
revenue to €25.5 billion in 2016/17, a 4% 9%
13% competitions grew by 3% to over €1.8 billion in 2016/17,
increase on 2015/16. 0.7 0.7 with the ‘big five’ leagues receiving 67% of total
2.8 3% 3%
11% distributions.
2.6
11%
European football market €25.5 billion €24.6 billion The 2018/19 season will see the commencement of the
2016/17 2015/16 13.4
The ‘big five’ European leagues grew their 54% next UEFA broadcast rights cycle, with UEFA having
4.9 14.7
collective revenue by €1.3 billion (9%) in 2016/17, 19%
58% targeted a revenue increase of around 30%. Changes to
4.8
primarily due to increased broadcasting rights 19% the format with staggered kick-off times and guaranteed
revenue as the English Premier League, Spanish representation for clubs in the traditionally strongest
La Liga and French Ligue 1 recorded uplifts as markets (with Italy set to benefit most notably) are
they each entered new rights cycles. intended to attract broadcast interest.
This growth was not restricted to the ‘big five’ The 2018 FIFA World Cup Finals in Russia ‘Big five’ European leagues As both Champions League and UEFA Europa League
leagues, with total revenue across non-’big five’ will have an influence on the European revenue significantly increase, UEFA’s revenue
European leagues also increasing. football market in the next two years, initially Non ‘big five’ top leagues distribution model is also planned to change, giving
through revenue directly associated with the greater recognition of both current and historic sporting
Nonetheless, the 2016/17 season saw a tournament itself, and to a lesser extent the ‘Big five’ countries’ other performance and reducing the market pool share.
continuation of the trend of polarisation within indirect legacy uplifts for Russian football. leagues
the European football market, with the ‘big The higher distributions will particularly boost the
five’ leagues and the UEFA Champions League Despite these potential increases, it is unlikely FIFA, UEFA and National revenue of the top clubs consistently competing in the
growing at a rate unmatched by other leagues. that the Russian Premier League will close the Associations Champions League. Given that UEFA has clearly identified
gap, in revenue terms, to the ‘big five’ in the near competitive balance as a key issue to address across
Encouragingly, the financial position of European future, meaning that any possible transition to a Non ‘big five’ other leagues European football, then various alternative regulatory
football appears healthier than it has been for ‘big six’ is not imminent. measures will need to be considered in the coming
a long time, reflecting the global popularity Source: Leagues; UEFA; FIFA; seasons.
of the game, but also the professionalism of Deloitte analysis.
leading clubs and the strength of the regulatory
environment in which they operate.
08Annual Review of Football Finance 2018 |
Europe’s premier leagues
Revenue growth continued apace across The 2016/17 to 2019/20 domestic cycle Chart 2: ‘Big five’ European league clubs’ revenue – 2016/17 (€m)
the ‘big five’ European leagues in 2016/17 increased revenues by over 20% to a
6,000
with an increasing gap between the English reported €738m per season, yet this still Matchday
5,297
Premier League, which is in something of only represented c.40% of the value of the
1,358
a financial league of its own, and French domestic rights for the Premier League. Given 5,000 26% Broadcasting
Ligue 1 which has in recent years fallen the contribution of broadcasting revenue to
further behind the other ‘big five’ leagues. European football clubs’ total revenue, this Sponsorship/Commercial
4,000
relatively low value will see Ligue 1 fall further 3,221
61%
behind the other ‘big five’ European leagues in 2,854 2,793 Other commercial
‘Big five’ European leagues’ revenue revenue terms. 3,000
826 475
29% 17%
The success of La Liga’s collective sales 2,075
960 Note: Commercial revenue is not
approach has been such that broadcast Distributions by UEFA to clubs from the 34% 614 297 1,643
2,000 1,484 18% 345 disaggregated into ‘sponsorship’
52% 30%
revenue growth of 20%, following on from ‘big five’ participating in the Champions League 21% and ‘other commercial’ for clubs in
854 1,244
26% growth in the 2015/16 season, has seen and Europa League increased by 4% to 60% England, Spain and Italy.
31%
1,000
collective La Liga revenue increase to a record €1.2 billion and continue to play a significant role 718 217 819 182
13% 544 504 10%
50%
11% Source: Leagues; Deloitte analysis.
€2.9 billion in 2016/17. As a result, the Spanish in the financial performance of those leagues, as 19% 18%
league has overtaken the Bundesliga to be the well as on the Deloitte Football Money League. 0 England Spain Germany Italy France
second highest revenue-generating league in Southampton’s debut appearance in the Money Average revenue per club (€m)
the world. League top 20, and AS Roma’s absence, were 265 143 155 104 82
both heavily influenced by their participation (or
Average match attendance
Bundesliga clubs collectively maintained lack of) in UEFA competitions.
35,838 27,630 40,693 21,262 21,078
their strong overall revenue growth, primarily
through an increase in commercial revenues, up Premier League clubs took the largest portion Stadium utilisation
15% from 2015/16 to €1.4 billion representing of revenue distributed by UEFA to clubs in 96% 71% 91% 52% 67%
almost 75% more than generated by La Liga, 2016/17, in total receiving more than €300m,
as their traditional strength in this area shone over 50% more than Ligue 1 clubs, who
through. collectively earned the least of the ‘big five’
leagues. However, the ratio of the difference in The success of La Liga’s collective sales
2016/17 saw Serie A revenue grow by 8% to over distributions between the most and the least
approach has seen collective La Liga
€2 billion for the first time. The majority of this among the ‘big five’ did reduce, from almost 2:1
growth came from commercial sources, with to 1.6:1. revenue increase to a record €2.9 billion
revenue increasing by €91m (17%) on 2015/16, a
in 2016/17. As a result, the Spanish
remarkable €75m (over 80%) of which was solely
attributable to Internazionale, following the league has overtaken the Bundesliga
club’s acquisition by Chinese electronics retailer
to be the second highest revenue-
Suning in June 2016.
generating league in the world.
France’s Ligue 1 remained the lowest revenue-
generating of Europe’s ‘big five’ leagues, at €1.6
billion in 2016/17, despite entering a new four-
year domestic broadcasting rights cycle.
09Annual Review of Football Finance 2018 |
Europe’s premier leagues
European football’s ‘big five’ leagues are Reported figures suggest that the top two Chart 3: ‘Big five’ European league clubs’ revenue – 2014/15 to 2018/19 (€m)
already looking to other, more innovative, German divisions combined will generate an
6,000 5,650
ways of increasing revenue, as the intrinsic average of €1.4 billion per season over the four 5,400 England Italy
5,297
link between on field success and revenue year cycle to 2021/22, and see the Bundesliga 4,865
generation strengthens. return to its position as the second-highest 5,000 France Spain
4,403
revenue generating league in the world.
3,690 Germany
4,000
England Spain 3,350
The impact of the three-year broadcasting As 2016/17 saw the first results of the new 3,470 Source: Leagues; Deloitte analysis.
2,854
3,000 2,712 3,050
cycle which commenced in 2016/17 looks set full three-year collective rights sales deliver 2,392 2,793
to ensure the Premier League remains well increased broadcast revenues, La Liga publicly 2,437 2,280
ahead of the other ‘big five’ European leagues (in stated its desire to close the current revenue 2,053 2,075 2,130
2,000 1,917
1,790 1,720 1,880
revenue terms) over the coming years. gap to the Premier League. As such, it has looked 1,643
1,418 1,485
to develop and innovate on a worldwide scale.
1,000
However, the tender process for domestic and
Projected
international broadcasting rights for the three- La Liga’s international expansion, through the
year cycle beginning in 2019/20, whilst not yet ‘La Liga Global Network’ launched in 2017, 0 2014/15 2015/16 2016/17 2017/18 2018/19
completed, looks very unlikely to deliver the ‘step has the objectives of boosting the value of
change’ growth seen across the previous two international media rights, engaging new
cycles. followers of Spanish football, and generating France
commercial opportunities for both the league Whilst remaining the lowest revenue generating Replacement growth
A more mature phase of competition amongst and its clubs. of the ‘big five’ leagues, Ligue 1 clubs’ collective
bidders for UK domestic rights in this next revenues have grown at a faster rate from The leagues and clubs of the ‘big five’
cycle may see the Bundesliga and La Liga Italy 2015/16 to 2016/17 than in previous years, are applying innovative international
narrowing the revenue gap to the Premier Aggregate Serie A revenues are expected to primarily due to the start a new four-year strategies to widen their global reach, as
League somewhat, yet once the sale process grow, with the commencement of new UEFA domestic broadcast rights cycle. The international they attempt to grow commercial
for international rights is completed, we expect broadcast deals and changes to Champions rights cycle commencing in 2018/19 is expected revenues. Several have opened offices
the total value of Premier League broadcasting League regulations, guaranteeing four Serie to deliver a less significant revenue increase. in key overseas markets to manage local
rights to remain in excess of €1 billion more than A clubs will compete in the Group stages partnerships alongside market specific
any other league. of the competition, hence increasing UEFA Recent external investment in a number social media accounts and events.
distributions from the 2018/19 season. of French clubs is hoped to stimulate an
Germany increased level of competitiveness and in turn, An example of further innovation is
Whilst 2016/17 saw the Bundesliga temporarily In addition, 2018/19 will also mark the start of commercial attractiveness, to Ligue 1, as it Digital Billboard Replacement (‘DBR’)
slip below La Liga in revenue terms, the a new international broadcasting rights cycle looks to keep pace with the revenue growth of technology, allowing different brands to
perennially impressive commercial performance for Serie A, delivering growth of around 80% other ‘big five’ leagues. advertise to different audiences or in
of German clubs (9% ten-year CAGR) provides a on the existing deal, to a reported €340m different geographies simultaneously.
strong platform on which the new domestic and per annum. Despite such growth, the value of The recent announcement of a new DBR has already been used across the
international broadcasting rights cycle looks set Serie A international broadcast rights remain broadcasting tights arrangement with Mediapro ‘big five’ leagues to varying degrees, and
to deliver a further revenue boost in 2018/19. comfortably less than those of the Premier covering the period 2020/21 to 2023/24 may deliver enhanced commercial
League and La Liga. provides confidence about the medium term revenue generating opportunities.
financial growth of Ligue 1.
10Annual Review of Football Finance 2018 |
Europe’s premier leagues
Boosted by the increased revenue of Germany Chart 4: ‘Big five’ European league clubs’ revenue and wage costs – 2015/16 and 2016/17 (€m)
Premier League and La Liga clubs, total Bundesliga clubs increased their wage bill by
6,000
wage costs across Europe’s ‘big five’ 10% to €1.5 billion. 5,297
leagues grew by 4% to €8.5 billion. The 4,865
overall wages to revenue ratio across the The Bundesliga still has the lowest wages 5,000
‘big five’ leagues reduced to 58%, with to revenue ratio (53%) of any of the ‘big five’
the weakening of the pound against the leagues, but this increased during the year amid
4,000
euro masking the underlying extent of limited revenue growth.
wage growth. 2,854 2,793
2,712
Bayern Munich continued to dominate on 3,000 3,045
2,894 2,437
the pitch, becoming the first team to win five 1,917
2,075
England consecutive Bundesliga titles, as their wage 2,000 1,485
1,643
Premier League clubs’ wage costs increased costs of €265m reached almost €100m more 1,680
1,476 1,478 1,380
by 9% to almost £2.5 billion (€2.9 billion), as than those of second-highest wage spenders 1,341 1,343
1,000 1,019 1,078
clubs benefitted from increased centralised Borussia Dortmund.
distributions, helping to maintain their position
as by far the biggest wage spenders – paying Italy 0 15/16 16/17 15/16 16/17 15/16 16/17 15/16 16/17 15/16 16/17
out over 70% more than the top Spanish clubs. Serie A’s wages to revenue ratio reduced from England Spain Germany Italy France
70% to 67% in 2016/17, it’s lowest level since the 63% 55% 61% 59% 49% 53% 70% 67% 69% 66%
Spain 2005/06 season, but remained the highest ratio
152 145 74 84 75 82 67 69 4851 54
As clubs reinvested the additional revenue across the ‘big five’ leagues. Wage costs grew
generated from the collective sale of 3% to €1.4 billion, dominated by Internazionale’s
broadcasting rights, clubs in La Liga 22% increase in wage spending as Suning Revenue Wage costs Wages/revenue ratio Average club wages
consolidated their position as the second- supported investment in the squad.
highest wage spenders of Europe’s ‘big five’ Source: Leagues; Deloitte analysis.
leagues in the 2016/17 season. Juventus’ wage spend increased 19% to €262m,
over 25 times larger than Crotone, who at
Wages increased by 14% to almost €1.7 billion, €10.3m had the lowest wage spend of any club France All five leagues wages/
the fastest growth of any of the ‘big five’ leagues in the ‘big five’ leagues. Wage spending in Ligue 1 grew by 6% to almost
revenue ratios are below
for the second year running. Real Madrid and FC €1.1 billion in 2016/17, as increased broadcasting
Barcelona again accounted for almost half (47%) revenues were reinvested into playing squads. 70%, the industry marker of a
of all wage spend, each spending nearly 30 However, the French league’s wages to revenue
club’s financial health.
times more than the lowest-spenders, Leganes. ratio fell by three percentage points to 66%, as
only 37% of revenue growth was spent on wages.
Despite this recent period of rapidly increased
wage spending, La Liga’s wages to revenue ratio Despite a reduction in wages costs of 7% in
fell by two percentage points to 59% in 2016/17, 2016/17, PSG remain the largest spenders in
highlighting the scale of growth in clubs’ France. The impact of the acquisition of Neymar
revenue and the success of financial regulations Jr., and the Parisian club’s other transfer activity
implemented by the Spanish governing bodies. in the summer of 2017 is likely to see wage costs
increase substantially in 2017/18.
11Annual Review of Football Finance 2018 |
Europe’s premier leagues
The effectiveness of financial regulations Chart 5: ‘Big five’ European league clubs’ profitability – 2012/13 to 2016/17 (€m)
across the ‘big five’ leagues, and beyond,
1,200 UEFA FFP Start of FFP Start of Enhanced
1,203
Encouraging financial
continues to be reflected in the improving
operating results across the continent.
regulations
first
break-even
requirement
break-even
compliance
version of FFP
regulations
sustainability
approved monitoring
1,000 UEFA’s Financial Fair Play Regulations
– complemented by the introduction
England 800 739 721 and evolution of financial regulations
For the first time, no Premier League clubs in respect of various European leagues
681
recorded operating losses, delivering a record – have helped encourage clubs across
600
aggregate operating result of £1,034m, more Europe to improve their governance,
437
than double that reported in 2015/16 (£509m). 397 transparency and financial behaviour.
347
400 316
264 343
Spain 234
284
UEFA’s compliance monitoring and
172 190 250 260
After a recent concerted effort by both La Liga 138 171 enforcement activities have promoted
200 104
81 96
and its clubs to operate in a more financially 136 the effectiveness of their regulations.
93 103
sustainable manner, the combined profitability (3) (26) In the first four seasons to 2016/17,
(66) (64) (67) (40)
0 (97)
of clubs was maintained in 2016/17 at a (102) (140) (35) (51)
around 30 clubs in breach of the
(84) (160) (53) (98)
combined operating profit of €437m (up from (116) (110)
(149) (143) (133) break-even requirement have been
€397m). -200 07/08 08/09 09/10 10/11 11/12 12/13 13/14 14/15 15/16 16/17 subject to sanctions and settlement
arrangements.
The introduction and monitoring of robust England France Germany Note: The operating result is the net of revenues less
financial controls by La Liga over recent wage costs and other operating costs. The operating Enhanced requirements for clubs from
result excludes player trading and certain exceptional
seasons, coupled with the potential for Italy Spain 2018/19 should further promote the
items. Aggregate operating results for Spanish clubs
continued revenue growth has given Spanish were not available prior to 2013/14. effectiveness of UEFA’s regulations.
clubs the platform from which sustained Approved changes to the regulations
operating profits may be consistently achieved. Source: Leagues; Deloitte analysis. will include a forward-looking
assessment of clubs’ financial results,
Germany However, due to the limit on significant However, with Serie A revenue set to benefit harmonisation of certain financial
Bundesliga clubs generated a record aggregate investments, Bundesliga clubs may need to from upcoming changes to the UEFA competition reporting requirements, and new risk
operating profit of €343m in 2016/17, a 21% find alternative methods of generating revenue, structure and the start of a new domestic indicators in respect of debt-levels and
increase on 2015/16 (€284m) maintaining the enhancing the need for clubs to innovate as broadcast rights, Italian clubs will hope to deliver player transfer spending.
financial prudence which has delivered combined they look to develop their international brand an aggregate operating profit in the near future.
operating profit in each of the last 20 years. and seek commercial partnerships. Whilst a decade ago it appeared
France improbable that football could address
In March 2018 Bundesliga clubs voted to retain Italy Ligue 1 also reported an operating loss (€51m) the prevalent losses and spiralling debts
the ’50+1 rule’ which stipulates that members 2016/17 saw Italian clubs record a combined in 2016/17, despite the additional revenue of the clubs, cost control regulations are
of a club maintain the majority stake, and operating loss (€26m) as Serie A’s financial delivered by the new four-year domestic helping to deliver a more sustainable
voting rights, in the club and has contributed performance and sustainability continues to broadcast rights cycle and increased UEFA balance between costs and revenues
significantly to this stability. gradually improve. distributions arising from AS Monaco’s strong for the long-term benefit of the game.
UEFA Champions League campaign.
12Annual Review of Football Finance 2018 |
Europe’s premier leagues
At a time when UEFA have reported Portugal Chart 6: Selected other European league clubs’ revenue – 2016/17 (€m)
improved operating results across the Portugal’s Primeira Liga is now the only major
800 734
region, and positive rates of revenue European league where clubs’ broadcast rights 52
701
growth, Europe’s non ’big five’ leagues’ are sold on an individual basis, resulting in 242 154
revenue continues to develop strongly. significant revenue inequality. This disparity 600
The influence of UEFA club competition is further enhanced by UEFA distributions 428 451
participation is becoming increasingly consistently being received by the same three 352 79 366
400 180 37
defining, and changes to UEFA clubs; Benfica, Porto and Sporting Lisbon, 88
competitions from the 2018/19 season who generate the majority of the combined 211
190 184 176 162
200 81 88 50 129
could have a potentially significant impact revenues, which have increased 6% to €366m. 46
110
84 111 44 59 78 64
for these non ‘big five’ leagues. 88 35
51 79 56 19 25 27 15 37 22 43
Scotland 0 Turkey Russia Netherlands Portugal Scotland Denmark Austria Sweden Poland
Scottish Premiership revenues increased by
Average revenue per club (€m)
Turkey 63% to £181m in 2016/17, driven by the on-field
41 44 25 20 18 13 18 10 8
The Turkish Süper Lig is the largest revenue success of Celtic, and the return of Rangers to
generating European league outside of the ‘big Scotland’s top-flight. Celtic’s participation in the Wages/revenue ratio
five’, with total revenues of €734m. Broadcast 2016/17 UEFA Champions League contributed 71% 72% 59% 71% 58% 60% 70% 53% 62%
revenues represent almost half of total revenue. €32m, more than the amount distributed across Number of clubs
A successful bid to host EURO 2024 could help all 12 clubs from the Scottish leagues’ own 18 16 18 18 12 14 10 16 16
boost the financial future of Turkish football. broadcast revenues in 2016/17.
Russia Aggregate matchday and commercial revenues Denmark, Sweden and Poland Matchday
Ahead of hosting the 2018 FIFA World Cup both increased by over 40%, as Rangers Each of these leagues were heavily influenced
Finals, the Russia Premier League remains the participation in the top division for the first time by the performance of their member clubs in Broadcasting
seventh largest revenue generating league in since the 2011/12 season, helped to drive the UEFA competitions, after strong showings in the
Europe. The financial profile of Russian football top division of the SPFL back into the top ten previous season. The failure of Danish, Swedish Sponsorship/Commercial
is dominated by income from commercial revenue generating leagues in Europe. and Polish clubs to replicate the respective
sources, which accounted for 83% of total success seen by FC Copenhagen, Malmö and Other commercial
revenues. Austria Legia Warsaw in previous season resulted in
Austrian Bundesliga revenue grew by 10% to reduced distributions, and overall revenue for Note: This chart includes a sample
Netherlands €176m, primarily driven by increased UEFA each of their domestic leagues. of countries ranking below fifth in
terms of average club revenue for
Ajax’s run to the Final of the Europa League saw distributions up €5m to €16m as a result of the
the most recent available financial
UEFA distributions to Dutch clubs increase by performance of Red Bull Salzburg in reaching None of these leagues were represented in the results. Figures in respect of clubs in
€7m to €55m. Yet despite this, total revenues the Champions League Play-off round before 2017/18 Champions League, and as such no Sweden relate to year to December
fell by 6% to €451m in 2016/17, as no Dutch club competing in the UEFA Europa League Group significant improvement is expected to be seen 2016. Figures in respect of Turkey,
Portugal and Russia are for FY2016.
reached the Group Stages of the Champions stage. in the next edition. Figures in respect of clubs in
League. Feyenoord’s participation in 2017/18 Denmark and Poland relate to the
should aid a recovery in the next edition of this 2017/18 has seen Red Bull Salzburg reach the year to December 2017.
report. Semi-final of the Europa League, which should
Source: Leagues; Club accounts;
boost Austrian Bundesliga revenues further in UEFA; Deloitte analysis.
next year’s edition.
13Annual Review of Football Finance 2018 |
Sports Business Group
Deloitte Football Intelligence Tool
The Deloitte Football Intelligence Tool (FIT) is used by clubs,
01
League wide trends
and analysis
investors, industry experts and the media to quickly and reliably
Big five European
interrogate the finances of the European football market. leagues plotted on
FIT gives you access to over 20 years of data contained within map, with users
the Annual Review of Football Finance.
able to select one
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02
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This digital solution allows the user to This subscription service is ideal for: a range of league
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Annual Review of Football Finance Databook and position within the market and to attendance.
and a host of other industry information. We benchmark against other clubs;
hope FIT will be a valuable asset for anyone
looking to deepen their understanding of the •• Aspiring club investors looking to identify and
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14Annual Review of Football Finance 2018 |
Sports Business Group
05 10
Club profiling
Matrix analysis Explore the local
on a club-by-club area of a given club,
basis with the axes
defined by user
with population data
displaying the socio- 11
selected metrics.
Peer group averages
and correlation lines
06
Overall revenue
economic profile of
the catchment area.
Historical details
of key financial
measures and
also plotted. trend for given
selection of clubs,
with ability to click
08
NEW for this year, users can see
supporting matrix
analysis for two
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through to further the performance of their selected simultaneously.
explore historic club over time, compared with a
revenue trends. selected peer group.
04 09
Users can create their
An interactive map of
Europe allows the user to
quickly select the clubs
07
Users can configure
own peer groups by
filtering by a variety of
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Individual club
benchmarking
most appropriate to their the screen by selecting stadium size, whether
specific geography and any metric they wish a club has played in
circumstances, with FIT to explore, setting up European competitions,
currently containing data the overall dashboard their average attendance
for the ‘big five’ European to reflect their areas or their league position.
leagues and the EFL of interest, providing
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specific clubs.
15Annual Review of Football Finance 2018 |
Sports Business Group
Premier League clubs Matchday revenue slipped marginally by 1%
(£5m) to £617m, and represents its lowest
proportion of the total (13%) in Premier League
history. The increases in broadcasting revenue
have allowed many Premier League clubs to
freeze season and matchday ticket prices for a
number of years now, while other clubs, such as
Everton, took the step to reduce the price they
Premier League clubs’ revenue grew by further commercial value to their inventory. charge their fans. Furthermore, 2016/17 was
25% to £4.5 billion in 2016/17. This was Impact of individual With Chelsea recently agreeing a reported the first year of a Premier League cap of £30 on
primarily due to the Premier League’s £50m five-year shirt sleeve deal with Hyundai, away fan tickets, in efforts to make away games
new three year broadcasting rights
clubs reported to be double the previous record more financially accessible to fans.
arrangements coming into effect, helping Of the 17 clubs that competed in the in this category held by Manchester City, it is
drive revenue to record levels. Premier League in both 2015/16 and clear there is appeal and value for commercial
2016/17, Manchester United generated partners.
the most revenue (£581m), as the Future revenue growth
Premier League clubs’ revenue highest revenue generating football Chart 7: Premier League clubs’ revenues
The average revenue of a Premier League club club in the world. Leicester City had the 2014/15-2018/19 (£m) Although the Premier League’s recent
was £228m in 2016/17, an increase of £46m, largest revenue growth in 2016/17, with domestic rights selling process for
6,000
and double the amount as recently as 2010/11 their total increasing £105m (81%) to Projected 2019/20 – 2021/22 has not secured the
(£114m per club). The impact on revenue of the £234m, the biggest ever single year 5,000 large increases seen in previous cycles,
4,780
strong domestic and international demand for revenue increase of an English club. 5,000 4,552 1,380 once the sales process has been
1,280
Premier League football from broadcasters and This was principally due to their 1,167 27%
28%
completed for the remaining domestic
26%
sponsors alike is clear to see. remarkable run to the UEFA Champions 3,639 and international rights, we still expect
4,000
League quarter-finals which saw them 3,350 it to deliver overall growth in Premier
1,090 2,950
Over 90% of the £913m increase in Premier receive UEFA distributions of £70m. 2,768 2,850 League broadcasting values.
987 30%
60%
59%
29% 61%
League clubs’ revenue in 2016/17 was due to 3,000
broadcasting revenue, with the financial reward Other factors influencing large 1,780
1,927 In the shorter term, 2017/18 was the
53%
of participation in the Premier League now increases in clubs’ revenue included 2,000 53% first season in which five English teams
greater than ever. Total central distributions to Tottenham’s return to Champions competed in the Champions League,
clubs increased by 46% (£760m) to £2.4 billion, League football and Liverpool’s opening while 2018/19 marks the start of a new
1,000
an average increase of £38m per Premier of their new Main Stand. Every one of 617 650 670 UEFA broadcasting rights cycle, both of
583 622
League club. Clubs competing in the Premier the twenty clubs set a new personal 18% 17% 13% 13% 13%
which will lead to significant increases
League can now expect to receive between record for total revenue in 2016/17. 0 14/15 15/16 16/17 17/18 18/19 in UEFA distributions received by
c.£95m and £150m in central distributions per Average revenue per club Premier League clubs. Coupled with
season, with the ratio between the highest and 168 182 228 239 250 the increases in commercial revenue,
lowest earning recipients of 1.6:1 in 2016/17 Commercial revenue grew by 7% (£77m) to £1.2 we expect total Premier League clubs’
helping the Premier League to retain its status billion and now makes up just over a quarter of Commercial Matchday revenue to rise to £4.8 billion in
as the most equal of the ‘big five’ leagues. the total. We expect to see further growth, as all 2017/18 and £5 billion in 2018/19.
Premier League clubs have been able to feature Broadcasting Source: Deloitte analysis.
shirt sleeve sponsors from 2017/18, adding
16Annual Review of Football Finance 2018 |
Premier League clubs
Whilst the Premier League’s central Chart 8: Premier League and Championship clubs’ average revenues – 2016/17 (£m)
distribution mechanism remains the most Media rights 2019-2022
500
equal amongst the ‘big five’ leagues, there
remains a significant revenue variance In February 2018, the Premier League
between groups of clubs within the league. announced that it had sold the main five 400 353
The ‘big six’ clubs generated an average of packages of domestic broadcasting rights 103 316
£415m each in 2016/17, compared to just to Premier League football for the 111
300
£147m across the rest of the clubs. 2019/20-2021/22 cycle, with Sky Sports 12
gaining four packages (128 matches per 52
13 183
season) for £3.6 billion (£9.3m per game), 200 17
132 39
122 122
Premier League clubs’ revenue levels and BT Sport taking one package (32 10
113 12 5
The vast majority of Premier League clubs matches per season) for £885m (£9.2m 100 92 51
6 20
ranked in the top 40 revenue generating clubs per game). As a result, the Premier 54 53
8
10 4
7 3
6
27
in the world in 2016/17, with five of the Premier League has so far secured 87% of the 21 13
0 UCL clubs UEL clubs Premier Premier Championship Championship
League’s ‘big six’ clubs taking positions in the value generated for the 2016/17-2018/19 League League with without
top ten. Amongst the rest of the ‘big five’, only cycle for domestic live rights with two (other) (relegated) parachute parachute
Spain, through Real Madrid and Barcelona, has packages of a total of 40 games per
more than one club in this elite top ten. season still remaining to be sold.
Commercial
The average revenue of Premier League clubs Whilst on the face of it, this may appear Record-breaking
participating in the Champions League fell to disappointing, especially given the Broadcasting other
£353m in 2016/17. This was principally due to decrease in value per match broadcast,
transfer spending
Manchester United taking part in the UEFA the considerable growth over the last two Broadcasting UEFA We have already seen some clubs
Europa League, and Chelsea and Liverpool cycles means that the Premier League will utilising their significant revenue
also failing to qualify for Europe’s elite club still comfortably remain the market leader. Broadcasting PL central increases, with a record £1.9 billion
competition. However, the importance of the spent on transfers in the 2017/18
Europa League was once again highlighted by The sales process for the international Matchday season, as clubs seek to gain a
Manchester United’s successful campaign, rights is ongoing and we anticipate competitive advantage over their peers
earning a Champions League spot in 2017/18 further growth in the overall value of Note: UCL clubs comprised Arsenal, in pursuit of both success and survival.
despite a sixth place finish in the Premier the international broadcasting rights, Leicester City, Manchester City
and Tottenham Hotspur. UEL clubs
League. which already generate over £1 billion a We may again see similar levels of
comprised Manchester United,
season. When the majority of rights for Southampton and West Ham spending in the coming year, with the
The three relegated clubs in 2016/17 had £122m the new cycle are tendered later in 2018, United. FIFA World Cup providing the perfect
average revenue, with all three clubs receiving with significant uplifts already agreed in shop window for talent; indeed, the
Source: Premier League; UEFA;
a parachute payment of c.£42m in 2017/18. the USA, China, Brazil and Africa Deloitte analysis.
2018/19 season may be the first time
In 2007/08, ten years previously, parachute through to 2022, it is likely that the new Premier League clubs’ surpass the
payments to clubs were just £12m. broadcasting arrangement’s values will £2 billion mark in gross transfer spend.
once again represent a record, despite
the domestic reduction.
17Annual Review of Football Finance 2018 |
Premier League clubs
Premier League clubs’ wage costs grew by
9% in 2016/17, reaching a record Impact of individual
Chart 9: Premier League clubs’ revenues
and wage costs – 2015/16-2016/17 (£m) Market leading
£2.5 billion. This relative restraint,
compared to revenue increases, meant
clubs 5,000 4,552 revenues, cost control
revenue growth outpaced wage growth for
only the third time in the last ten seasons,
The only clubs to pay more than the
league’s average wage costs were the 4,000 3,639 regulations and
resulting in the lowest wages/revenue
ratio in almost 20 years.
‘big six’, once more demonstrating the
gap in financial resources between
3,000
stronger financial
them and the rest of the league. Absent
of European competition and the 2,277
2,487 discipline exercised
by club owners and
Premier League clubs’ wage costs associated costs, Chelsea and Liverpool 2,000
In 2016/17, the Premier League’s wages/revenue were the only clubs to reduce their
ratio fell to just 55%, its lowest level since
1997/98 (52%). For the first time ever, Premier
wage costs year-on-year, yet both teams
saw improvements in their fortunes
1,000
management, mean
League clubs’ revenue has grown at a faster rate
than wages over a ten year period, while all bar
with the former being crowned Premier
League champions and the latter
0 2015/16 2016/17
that they no longer
one of the clubs participating in the 2016/17 qualifying for the Champions League.
need to, or do, spend
63% 55%
Premier League grew their revenue at a faster 114 124
rate than their wage spend since 2012/13. Manchester United (£263m) continued
to be the division’s highest wage payers all their revenue
Such relative restraint from Premier League
clubs in wage spending is assisted by the
on a 12 month reporting basis, but their
wages/revenue ratio of just 45% was Revenue Wages/revenue ratio growth in increased
continued implementation of both the Premier
League Short Term Cost Control Rules, as well
the second lowest in the league behind
Tottenham Hotspur (42%). Leicester Wage costs Average wage costs wages.
as UEFA’s Financial Fair Play Regulations. It City, as in 2015/16, had the largest per club
also reflects the financial lead that the Premier increase in relative terms (40%), aside
League has its over its rivals, as well as the from the promoted clubs. This increase
stronger financial discipline exercised by club is attributable in part to investment in Source: Deloitte analysis.
owners and management, that they no longer the playing squad in the clubs maiden
£1.9 billion
need to, or do, spend all their revenue growth in Champions League campaign.
increased wages.
Contributed by English
professional football
to Government in
taxes in 2016/17
18Annual Review of Football Finance 2018 |
Premier League clubs
Only one Premier League club reported Chart 10: Premier League clubs’ revenues and wage costs – 2016/17 (£m)
a wages/revenue ratio in excess of 70%,
581
the indicative warning threshold level 600
Tottenham Hotspur
used by UEFA as part of their Financial Fair
Play Regulations. This is a decrease from 476
500
seven clubs in 2015/16, as clubs once again
419
West Bromwich Albion
West Ham United
showed spending restraint in the first year
Leicester City
368
AFC Bournemouth
400 365
Southampton
of a more lucrative broadcasting rights
Average
cycle.
Middlesbrough
306
Swansea City
Everton
Sunderland
Stoke City
300
234 228
Watford
Hull City
Burnley
263 264
Correlation between wage costs and 221 185 182 171
200 199 208
league position 138 136 136 128 126 122 122 122 117
The Spearman’s rank correlation coefficient, 127
Liverpool
124
Man City
Man Utd
113
Chelsea
112
Arsenal
which measures the relationship between 100 95 105
85 99
84
79 72 76
league position and total wage cost rank, 61 65 61
increased to 0.81 in 2016/17. Nine clubs finished 0 45% 55% 47% 60% 57% 42% 48% 55% 51% 62% 61% 57% 53% 62% 77% 67% 62% 50% 53% 52%
within one place either side of the ranking
of their wage costs. This level of correlation
contrasts to the 2015/16 season, where the Revenue Wage costs Wages/revenue ratio Note: The 2016/17 financial statements for Crystal
relative performances of Aston Villa, Leicester Palace were unavailable at the time of publication.
Manchester City figures are for a 13 month reporting
City and Chelsea helped drive the lowest level of
period. AFC Bournemouth figures are for an 11 month
correlation ever recorded in our analysis (0.54). reporting period.
Future wages trends
The 2016/17 league finishing positions were Source: Deloitte analysis.
much more aligned to wage spend, as the top In an environment of cost control, the Of particular interest may be the future
six wage spenders filled the top six league clubs’ wages/revenue ratio is expected to structuring of wage spend, with
positions. At the other end of the table, the remain relatively low, and with the top six performance related pay, particularly Only one club reported a
three promoted clubs had the three lowest wage spenders in 2016/17 occupying the amongst those clubs recently promoted,
wages/revenue ratio in excess
wage costs in the Premier League, with only top six positions in the Premier League in being more and more common. Clubs are
Burnley maintaining their Premier League status. 2017/18, a strong correlation between increasingly incentivising and rewarding of 70%, which demonstrates
However, with four different winners in the wage costs and league position seems to players for avoiding relegation, with
the new financial discipline
last six seasons, and all three promoted clubs be being maintained. bonuses for additional points earned and
surviving in 2017/18 for only the third time in number of appearances contingent on that amongst the Premier League
Premier League history, the Premier League Although it is anticipated that wage costs survival, alongside the more traditional
clubs.
continues to prove itself as one of the most will continue to rise in the coming seasons, success-based bonuses.
competitive, and attractive, leagues in Europe. we do not foresee increases to be at a level
which can jeopardise the profitability of
the Premier League as a whole.
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