UEFA Report Shows The Few Teams Making Money And The Many That Are Not

January 22, 2019 admin UEFA 0

According to the just-released UEFA Benchmarking report, the Premier League accounted for 27% of all revenue generated by Europe’s top-division teams. (Photo by Catherine Ivill/Getty Images)Getty

The annual UEFA Benchmarking report has been issued by Europe’s governing body. It is the 10th report of its kind and it provides a financial picture of the over 700 teams operating in the top-flight of the 55-member associations.

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It is a massive document packed with tables, graphs, charts and lots of statistics. The primary focus of the document is the financial results for the 2016/17 season although in some cases, information, when it was available for the 2018 and the early part of the 2019 seasons, is included for the purpose of identifying trends.

The picture painted by the report is one of improvement since the first report and in particular, over the last few seasons. The report acknowledges that the use of averages across the leagues in some instances provides just a snapshot of economic health or issues. For example, the Turkish League generated a large cumulative loss, but it doesn’t mean that all teams lost money.

Although the financial picture has improved there are a few key findings worth summarizing.

  • The improvement has been driven by a relatively few teams within just a few leagues.
  • New TV contracts that kicked in for 2016/17, particularly the Premier League deal, were key in moving the profit/loss dial.
  • An inflated transfer market helps to generate better short-term financial results and the value of transfers increased dramatically from 2014 and 2017 and that trend continues.

Accounting for transfer activity is somewhat counterintuitive. When transfer spending goes up, the net cost of transfer activity, and therefore the level of aggregate club losses, is likely to go down. This is because of a difference in timing: profits, which increase if transfer activity goes up, are triggered immediately on sale, while costs, which also increase if transfer activity goes up, are spread out over the duration of players’ contracts (typically three to five years). UEFA Benchmark Report Financial Year 2017

Here are the highlights from the UEFA Benchmark report.

Profitability

(The benchmarking report) ..uses two different measures of clubs’ profitability (i.e. their profits or losses). The first is operating profit, which measures clubs’ underlying ability to generate profits that can be reinvested back into transfer and financing activity. The second measure is net profit after tax, which we refer to as ‘bottom-line profit’, as it is the final result after all costs, gains and losses. UEFA Benchmark Report Financial Year 2017

 #1 For the fourth consecutive year the profit and loss position of European teams was positive with a cumulative operating profit of €1.39B ($1.58B). Over the last 5 years, €4B ($4.56B) in operating profits have been generated.

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Between 2008 and 2012 losses amounted to over €1B ($1.14B). The net profit after-tax position (referred to as bottom-line profit by UEFA) in 2017 is €615M ($701M) and it is the first time since the benchmarking report was issued that a cumulative bottom-line profit has been recorded.

#2 A record 28 leagues reported aggregate profits for 2017, up from 25 in 2016 and 15 in 2014.

#3 English clubs lead with €549M ($626M) in net profits with Spain next with €168M ($191.5M). Turkish teams lost €239M ($272.5M). Five (9%) of the leagues generated €972M ($1.11B) of the €615M($701M) bottom line profit while the other 81% lost a combined €357M ($407M).

#4 Size matters: nine of the ten largest clubs by revenue also reported the largest operating profits. Manchester United is top with an operating profit of €222M ($253M) while Arsenal is second with a 2017 operating profit of €144m ($164M).

#5 Over the last ten years, Manchester United FC top the list of profitable teams with a cumulative operating profit of €1.2B ($1.35B). Real Madrid CF (€936M/$1.07B), FC Barcelona (€666M/$759M), Arsenal FC (€635M/$724M) and FC Bayern München (€612M/$698M) come next.

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Revenue

#6 Europe’s 710 top-division clubs earned a record €20.11B ($22.8B) in revenues in the 2017 financial year, an increase of 77%. A decade ago the total was €11.35B ($12.4B).

#7 Almost half (€9.7B/$11.06B) of the €20B ($22.8B) was booked by just 30 of the teams.

#8 Premier League clubs’ aggregate revenue amounted to €5.3B ($6.04B). It is almost double that of La Liga and the Bundesliga and comprises 27% of Europe’s total revenue.

#9 Manchester United generated the highest revenue with €676M ($770.6M), €1M ($1.14M) more than Real Madrid.

#10 Only Barcelona, Juventus, and Real Madrid banked more TV money than the 20th Premier League club.

#11 The 20 Premier League clubs received €1.8B ($2.05B) more TV money than they did a decade ago and 54% of Premier League revenue comes from TV rights.

#12 Broadcast revenue across the member association top-flight leagues increased by €1.22B ($1.39B) – 19% more.

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#13 Sweden has the most equitable model in respect to the distribution TV money with a ratio of 1:1.2. The Premier League ratio is 1:1.3 while Portugal is 1:15.4!

#14 The only countries in Europe that don’t sell TV rights centrally are Cyprus and Portugal.

#15 Celtic received six times as much from participating in the Champions League group stage as they did from Scotland’s domestic TV deal.

#16 Sponsorship and commercial revenues have increased by €2.6B ($2.96B) to €6.3B ($7.18B) in the last decade with €1.6B ($1.8B) of the increase benefiting the top 12 teams. Ten years ago, the top 12 clubs had commercial and sponsorship revenues of €805M ($917.7M).

#17 Premier League teams averaged €67.8M ($77.3M) in sponsorship and commercial revenue but the Bundesliga was not far behind averaging €63.7M ($72.6M). La Liga was a distant third way at €35M ($39.9M). The 38 Premier League and Bundesliga teams account for 40% of the annual €6.3B ($7.18B) total.

Attendance

#18 Borussia Dortmund had the highest average home attendance at 79,496 with Bayern Munich second (75,000) and Manchester United (74,976) third.

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#19

#20 The percentage of overall club revenue from ticketing continues to fall – from 22% in 2008 to 14% in 2017.

#21 15 clubs had aggregate league match attendances of over 1 million in 2017/18. Manchester United attracted 1.424M spectators although Borussia Dortmund had a higher average 79,496 to United’s 74,976. Tottenham Hotspur benefited from a “temporary” move to Wembley and averaged 67,953.

Barcelona and Real Madrid averaged around 66,000. Scottish clubs Celtic and Rangers were #9 and #19 respectively in average attendance and finished above the likes of PSG.

#22 In 2017, Paris Saint-Germain (€86.9/$99.06 per spectator) had the highest stadium yield in Europe, moving above Arsenal FC and Chelsea. Manchester City was surprisingly low at €48.1/$54.8, just above the Premier League average of €45.7/$52.09.

Wages

#23 Nine of the top 20 biggest payers in Europe are in the Premier League – Manchester City, Manchester United, Chelsea, Liverpool, Arsenal, Tottenham, Crystal Palace, Leicester, and Southampton.

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#24 The average Premier League team pays out €148.2M ($169M) in wages, next is Spain €84.4M ($96M).

#25 Real Madrid is the top payer at €406M ($463M) and also reported the largest wage increase in both percentage (32%) and absolute (€100m/$114M) terms.

The European Champions also became the first club to record a total wage bill in excess of €400M ($456M). (Barcelona broke through the €500M/$570M barrier in 2017/18).

#26 61% of revenue is paid out in wages. In 2012, the percentage peaked at 65.2%.

Transfers

#27 After remaining around the same mark between 2008 and 2014, transfer spending doubled between 2014 and 2017.

#28 Croatian clubs (117%) and Serbian clubs (87%) had the highest transfer earnings relative to total revenue.

#29 English Premier League clubs have been responsible for more than a quarter (26%) of global transfer spending in the last ten years. Together with La Liga, the Bundesliga, Serie A, and Ligue 1, these leagues accounted for 71% of the global transfer market.

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#30 Transfers doubled from an estimated €3.2B ($3.65B) in 2014/15 to €6.4B ($7.3B) in 2017/18.

#31 Teams in Portugal clubs spent 30% of there transfer spend outside of Europe while English clubs spent 3%.

 Kit

#32 In the 2018/19 season, there are 62 different manufacturers across the 54 top divisions.

#33 Nike 18% and Adidas 16% have a combined market share of 34%. Joma, Macron, and Puma are the only other manufacturers with a market share of more than 5%.

#34 Premier League has 16 non-European shirt sponsors.

Other

#35 In the last decade, the number of leagues with a “split-season” format has gone from 8 to 18.

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#36 Iceland has the shortest domestic league season and it lasts just 155 days. The Danish, Bulgarian and Romanian leagues take 317 from start to finish.

#37 Since 2009, 104 brand new stadium have been built, 16 rebuilt, and another 40 have undergone major retrofits and upgrades.

#38 Northern Ireland has the highest percentage of foreign ownership – 6 of 9 (66%). The Premier League is just behind – 13 of 20 (65%).

#39 The value of European clubs’ asset base rose by 10% in 2017 and now stands at €32.7B ($37.3B). The Premier League’ asset base sits at €9.8B ($11.2B). With a squad cost of €800M ($912M), Manchester City has overtaken Real Madrid as the most expensively built team in history in terms of transfer fees.

#40  The overall ratio of net debt to revenue has fallen from 63% in 2008 to 34% in 2017. Italian clubs are the most indebted with an average net debt of €67.4M ($76.8M), and the average of the Premier League is €66.2M ($75.5M).

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