The European football market grew by 4% (€0.6 billion) in revenue terms to €16.9 billion in 2010/11, according to the 21st Annual Review of Football Finance from the Sports Business Group at Deloitte.
Despite a difficult economic climate, Europe’s ‘big five’ leagues (Bundesliga, La Liga, Ligue 1, Premier League and Serie A) reported combined revenue growth of €181m (2%), to a collective total of €8.6 billion.
“Whilst this is a slower rate of increase than the average achieved over the previous decade (7%), it still represents a solid performance given the challenges in the wider economy. In particular, new Premier League and Serie A broadcast contracts commencing in 2010/11 emphasised top-flight football’s continued ability to drive audiences,” Dan Jones, Partner in the Sports Business Group at Deloitte, said.
The English Premier League remained the leading league in world football, with its clubs generating revenues of €2.5 billion in 2010/11 (an increase of 12% in Sterling terms). Further depreciation of Sterling against the Euro meant the gap to the German Bundesliga (€1,746m), the second ranked league, reduced by 6%, but was still €769million.
“The German Bundesliga has the highest average attendances in European football (42,100) which, when combined with an increase in commercial revenues from Europe’s largest economy, helped maintain its second placed revenue ranking. The additional UEFA Champions League spot for Germany from 2012/13 and 50% uplift in domestic league broadcasting rights from 2013/14 will help continue the Bundesliga’s impressive recent revenue growth and secure its status as the Premier League’s closest rival in revenue terms,” Jones said.
“European football’s continuing ability to achieve revenue growth in tough economic times is impressive. Whilst the rate of growth varies between leagues and clubs, the sport’s fundamental ability to engage and drive audiences remains core strength. Nonetheless, a number of leagues and clubs, particularly in France, Italy and Spain, face key challenges in improving the match day experience for spectators, with the acceleration of plans or completion of existing projects required in order to deliver long-term match day and commercial benefits. French clubs in particular need to capitalise on the stadium redevelopments being carried out in preparation for France hosting Euro 2016,” Jones added.
The ‘big five’ leagues’ wages increased by over €100m (2%) to exceed €5.6 billion in 2010/11, with a marked difference in the rate of growth amongst the five leagues.
As with revenues, Premier League clubs’ wages grew the fastest in 2010/11, to €1,771m, whilst La Liga (€1,005m) and Bundesliga clubs’ (€923m) wage costs both grew by 4%. Ligue 1 wage costs (€777m) were unchanged and Serie A clubs reduced wage costs by €24m (2%) to €1,157m. In England (70%), France (75%) and Italy (75%) the combined wages to revenue ratio of top division clubs was at least 70%, the first time this has happened in three of the ‘big five’ leagues in the same season.
The Bundesliga remained Europe’s most profitable league with a €33m (24%) increase in operating profits to €171m. The gap to the Premier League, where operating profits decreased to €75m, widened. Serie A and Ligue 1 remained loss making. In Spain, six La Liga clubs started the 2011/12 season in administration.
“Cost control continues to be European club football’s greatest challenge. The wages to revenue ratio across Europe’s ‘big five’ leagues has increased from 60% to 66% over the last five years, with wage costs growing at a faster pace than revenues. We therefore welcome UEFA’s financial fair play regulations which are aimed at helping clubs to more efficiently manage the relationship between revenue and expenditure. For those clubs wishing to participate in UEFA’s competitions, the financial results for 2011/12 will, for the first time, count towards their UEFA Financial Fair Play break-even calculation,” Adam Bull, Consultant in the Sports Business Group at Deloitte, said.