Revenues for the ‘big five’ European football leagues have exceeded €7 billion for the first time according to the latest Annual Review of Football Finance from the business advisory firm, Deloitte.  The overall size of the European football market has grown to €13.6 billion in 2006/07, up €1 billion from the previous season.

Dan Jones, Partner in the Sports Business Group at Deloitte, commented: “Revenue from the ‘big five’ European leagues grew by more than €0.4 billion (6%) to exceed €7 billion for the first time in 2006/07, representing more than half (52%) of the total European market.

“Amongst the ‘big five’ European leagues, English Premier League clubs generated the highest revenue in all three categories (matchday, broadcast and commercial) for the first time since 2001/02, reporting record total revenues of €2.3 billion in 2006/07. The revenue gap between the English Premier League and its nearest challenger, the German Bundesliga (€1.4 billion), widened to €0.9 billion in 2006/07.”

Both the German Bundesliga and Spain’s La Liga achieved year-on-year revenue growth of 15%, helping these two leagues to overtake Italy’s Serie A in revenue terms in 2006/07. With the return of Juventus to Serie A in 2007/08, the race for second place is expected to be a closely fought three-way contest in next year’s edition, albeit around €1 billion in revenue behind England’s Premier League.

The key performance indicator for the clubs is the wages to turnover ratio, which was in the relatively narrow range of 62% - 64% in four of the ‘big five’ leagues in 2006/07, with Germany’s Bundesliga the exception with a much lower wages to turnover figure of 45%.

Jones comments: “With a much lower wages to turnover ratio than in any other ‘big five’ European league, the German Bundesliga knocked England’s Premier League off top spot in terms of operating profitability in 2006/07, for the first time since our analysis began. However, German clubs’ impressive financial performance has not been matched by recent on-pitch success in European club competitions, in contrast with the recent sporting performance of English clubs. Whilst it is not an easy task to manage, achieving a suitable balance between financial management and success on the pitch is crucial for a league to be attractive to fans, broadcasters, sponsors and investors.”

Looking ahead to this summer’s transfer window and into next season, Alex Byars, Senior Consultant in the Sports Business Group, commented: “Following record levels of transfer spending by European clubs in both the summer 2007 and January 2008 transfer windows, we expect the showcase of talent at UEFA Euro 2008 to trigger buoyant levels of transfer activity this summer as clubs seek to invest some of their extra revenues in strengthening their squads.

“As on-pitch performance can have a large impact on a club’s revenues from one season to the next, we continue to strongly encourage clubs across Europe to maintain a flexible and sustainable cost base - irrespective of the size of club - to ensure that clubs only spend what they can afford. Performance related pay structures which are properly designed and implemented will not only help to insulate the club when on-pitch results are not as good as expected, but can also help motivate and reward players and management for winning.”

Other key findings of the Annual Review of Football Finance 2008 include:
The combined revenue of the ‘big five’ leagues contributed €7.1 billion (52%) of the total revenue of the European football market of €13.6 billion in 2007.

English Premier League clubs generated the highest revenues (€2.3 billion) of any football league in the world in 2006/07.  Their lead over the chasing pack, which grew to €0.9 billion in 2006/07, is expected to grow further to around €1 billion in 2007/08.

Following year-on-year revenue growth of 15% in both cases, the German Bundesliga and Spain’s La Liga both overtook Italy’s Serie A in revenue terms in 2006/07. The other ‘big five’ leagues’ total revenues in 2006/07 were Germany (€1.4 billion), Spain (€1.3 billion), Italy (€1.2 billion) and France (€1.0 billion).

In 1995/96 Italian Serie A clubs and the English Premier League clubs were fairly evenly matched in terms of overall revenue generation (around €450-500m) and average attendances (around 30,000 per league match).  In 2006/07 Serie A clubs’ revenue was less than €1.2 billion – around half the Premier League clubs’ total of €2.3 billion and also, for the first time since our analysis began, behind both the German Bundesliga and Spain’s La Liga.  Serie A average attendances plummeted to less than 20,000 in 2006/07, the lowest amongst the ‘big five’ leagues.

The Top 20 clubs in the Deloitte Football Money League in 2006/07 were all European and – with combined total revenue of €3.7 billion (up 11%) – accounted for more than 25% of the total European football market. Celtic from the Scottish Premier League were the only club from outside the ‘big five’ European leagues amongst the Top 20 clubs by revenue in 2006/07.
Below the ‘big five’ leagues, the Dutch Eredivisie generated the next highest revenue of any top tier domestic league (€398m in 2006/07). This is less than the English second tier Football League Championship competition whose clubs’ combined revenues were €489m in 2006/07. 

2006/07 was the first year of new UEFA Champions League broadcast revenue deals, which resulted in an increase in central payments to Champions League clubs to €0.6 billion, of which €0.4 billion (70%) were received by clubs from the ‘big five’ European leagues.

Order a copy of the report or listen to ARFF podcast

 - ENDS -

Note to editors

Basis of preparation
The News Release and Highlights are extracted from the relevant sections of the Deloitte Annual Review of Football Finance (May 2008).  The bases of the opinions and calculations are explained in that publication.

The analysis of the financial results of various European leagues, and comparisons between them, has been based on figures extracted from the relevant company or group financial statements or from information provided to us by national associations/leagues.

In some cases Deloitte have made adjustments to the disclosed figures to enable, in Deloitte’s view, a more meaningful comparison of the financial results and position of the football business on a club by club basis.  Deloitte have not performed any verification work or audited any of the information contained in the statutory financial statements for the purpose of their analysis.

In relation to estimates and financial projections, actual results are likely to be different from those projected because events and circumstances frequently do not occur as expected, and those differences may be material.  Deloitte can give no assurance as to whether or how closely the actual results ultimately achieved will correspond to those projected and no reliance should be placed by any party on such projections.

The published financial statements of clubs rarely split wages costs between playing staff and non-playing staff.  Therefore, unless otherwise stated, references to wages relate to total wages for a club/division, including playing and non-playing staff.

The publication and this News Release are intended to provide general information on the finances of the clubs in English football and other European leagues and cannot be relied upon to cover specific situations.  No responsibility for loss occasioned to any person acting, or refraining from action, as a result of any material in this News Release will be accepted by Deloitte & Touche LLP, Deloitte Touche Tohmatsu, and all other member firms of Deloitte Touche Tohmatsu organisation and their affiliates and in all cases any successor or assignee.  Readers should not act upon any material in this News Release without taking relevant professional advice.

Exchange rate
The exchange rate at 30 June 2007 has been used to convert figures to Euros (£1 = €1.4856).

About the Sports Business Group at Deloitte
Over the last 15 years Deloitte has developed a unique focus on the business of sport. Our specialist Sports Business Group offers a multi-disciplined expert service with dedicated people and skills capable of adding significant value to the business of sport. Whether it is strategic business reviews, operational turnarounds, revenue enhancement, stadium and facilities development plans, business planning, feasibility studies, economic impact studies, due diligence, benchmarking, reviews of sports regulations, market analysis, corporate finance advisory work, valuations and bid support on acquisitions and disposals; we have worked with more clubs, leagues, governing bodies, stadia developers, event organisers, commercial partners, financiers and investors than any other adviser.

For further information on our services you can access our website at www.deloitte.co.uk/sportsbusinessgroup

About Deloitte
In this press release references to Deloitte are references to Deloitte & Touche LLP which is among the country’s leading professional services firms, providing audit, tax, consulting and corporate finance services. Known as an employer of choice for innovative human resources programmes, it is dedicated to helping its clients and people excel. Deloitte & Touche LLP is the United Kingdom member firm of Deloitte Touche Tohmatsu (‘DTT’), a Swiss Verein whose member firms are separate and independent legal entities.  Neither DTT nor any of its member firms has any liability for each other’s omissions.  Services are provided by member firms or their subsidiaries and not by DTT.  Deloitte & Touche LLP is authorised and regulated by the Financial Services Authority. The information contained in this press release is correct at the time of going to press. For further information, visit our website at www.deloitte.co.uk