Despite wider economic pressures, the European football market continues to perform well with 11% growth in revenue terms to $24.6 billion in 2011-12, largely driven by Europe’s ‘big five’ leagues (Bundesliga, La Liga, Ligue 1, Premier League and Serie A) and the impact of UEFA Euro 2012. The ‘big five’ leagues account for $11.8 billion (48%) of total revenues, demonstrating the commercial attractiveness of the top clubs and competitions.
“Each of the ‘big five’ leagues posted record revenue levels in 2011/12, leading to an increase of 8% compared with 2010/11. The total revenue generated by these leagues is likely to surpass $12.5 billion within the next two years, twice the level they generated in 2001-02,” Dan Jones, Partner in the Sports Business Group at Deloitte, said.
The Premier League retained its status as world football’s highest revenue generating league, with its clubs achieving 4% growth to $3.7billion in 2011/12. New three year broadcast deals, starting in 2013/14 and worth over $8.5 billion, will ensure that the Premier League remains the clear market leader in revenue terms for the foreseeable future.
By delivering revenue growth of 7% to reach $2.37billion in 2011-12, the Bundesliga extended the gap between itself and third place La Liga to $136million. In local currency, this represented the largest absolute increase of the ‘big five’ leagues in 2011-12, with over three quarters of this growth driven by Germany’s two largest clubs, Bayern Munich and Borussia Dortmund.
“The Bundesliga looks well set to secure its position as the Premier League’s closest rival in revenue terms. Its future growth will be driven by new, more lucrative domestic broadcast contracts due to begin at the start of the 2013/14 season, and an increasing success in expanding into international markets coupled with an all-German 2013 Champions League final,” Jones added.
Elsewhere in Europe, Spain’s La Liga achieved revenue growth of 3% to $2.24billion in 2011/12, driven solely by Real Madrid and Barcelona’s aggregate increase. Italy’s Serie A rate of revenue growth (1%) was the slowest of the ‘big five’ leagues in 2011/12, with the league’s total revenue reaching $1.99billion.
Although it remains the lowest revenue generating ‘big five’ league, France’s Ligue 1 delivered the fastest rate of growth in local currency, with a 9% increase driving revenues to $1.44billion. The growth was entirely driven by Paris Saint-Germain, whose revenue increased by 120% to $282million. By contrast, the remaining 19 Ligue 1 clubs recorded an aggregate fall in revenues.
“With over half of this year’s revenue growth across the ‘big five’ European leagues attributable to commercial revenue increases, it makes the influence of the Middle East on European football particularly interesting. The continuing tough economic climate in Europe has meant clubs’ ability to achieve uplifts in commercial revenue is increasingly dependent on them attracting sponsors from across the globe. Some of the most notable examples of this being with Middle East based organisations. The recent announcement of Emirates’ agreement with Real Madrid means that the 2013-14 seasons will see both of the world’s top revenue generating clubs, Barcelona and Real Madrid, carrying Middle Eastern airline sponsors. There are further high profile examples of similar sponsorships across all of the ‘big five’ leagues,” Alexander Thorpe, Consultant in the Sports Business Group, said.
The combined wage costs of the ‘big five’ leagues were $7.7 billion in 2011/12. This is 8% higher than 2010/11 and represents a slightly slower growth rate than for their combined revenue. Premier League wages grew by 4% and remain far greater than those of the other ‘big five’ leagues, its total of $2.6 billion being 74% greater than that of its nearest rival, Serie A.
Bundesliga ($1.2bilion) and La Liga ($1.34billion) clubs’ wage costs both grew by 3%. Serie A clubs’ wage costs rose by 2% ($1.49billion). Ligue 1 experienced the fastest rate of growth in local currency, with wage costs increasing by 8% to reach $1.06billion. Almost three quarters of the Ligue 1 wage growth was due to Paris Saint-Germain, but the club’s revenue growth meant that their wages to revenue ratio fell from 69% to 53%.
“Ownership investment from the Middle East into European football now stands at in excess of $1.5bn. We continue to see owners from the region investing significantly in both the playing staff as well as the longer term infrastructure of their clubs. For example, in recent years Paris Saint-Germain and Manchester City have coupled their investment in title-winning playing squads, with a commitment to develop world class stadia and training facilities,” Thorpe, added.