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Cumulative revenue of Europe’s ‘big five’ leagues grew by 5% in 2012/13 to €9.8 billion

Annual Review of Football Finance 2014

 

  • The upper echelons of European football continue to demonstrate strong performance;
  • Much of the revenue growth driven by a limited number of eminent clubs, especially from commercial and broadcast sources;
  • Smaller clubs finding growth harder to achieve.

The ‘big five’ European leagues (Bundesliga, La Liga, Ligue 1, Premier League and Serie A) grew by 5% to €9.8bn in 2012/13, driving the total revenues of the European football market up 2% to €19.9 billion.

Dan Jones, Partner in the Sports Business Group at Deloitte, commented: “For the second consecutive year, each of the ‘big five’ leagues posted record revenue levels in 2012/13, with cumulative revenues having almost quadrupled since 1996/97. New television deals commencing in the two largest leagues will result in aggregate revenues exceeding €11 billion in 2013/14. These headline figures mask the underlying revenue profile of the leagues, which is ever more polarised.”

The Premier League remains, by a considerable distance, the world leader in revenue terms, with revenue rising by £165m (7%) to over £2.5 billion (€2.9 billion) in 2012/13. Over 60% of this growth was driven by the two Manchester clubs and Liverpool. In euro terms, sterling’s devaluation meant that the gap to its nearest rival, the Bundesliga, reduced to €928m.

Jones added: “The majority of the Premier League’s revenue growth in 2012/13 arose from commercial sources.  The Premier League’s aggregate commercial revenue now trails the Bundesliga by €55m, a quarter of the gap three years ago. For the first time, we expect England’s top league to lead Europe in all three main revenue categories in our next edition. The Premier League’s revenues are projected to reach around €4 billion in 2013/14, more than the projections for La Liga and Serie A combined.”

Another impressive year of growth saw the Bundesliga further consolidate its position as the second highest revenue-generating league in Europe and surpass the €2 billion mark for the first time. Aggregate revenue grew by €146m (8%) to €2,018m in 2012/13, with the on-pitch success of Bayern Munich and Borussia Dortmund driving over 80% of this increase.

The gap between the Bundesliga and Spain’s La Liga grew to €159m, despite the latter’s cumulative revenues reaching €1,859m in 2012/13. In contrast to the trend of recent years, the growth of €77m was not driven by the ‘big two’ of Real Madrid and Barcelona, who together achieved only a modest €6m increase in revenue. Growth was mainly attributable to revenue generated from new and improved broadcast rights deals for a number of clubs, along with improved performances by Spanish clubs in the Champions League.

As a result of their return to the Champions League, Juventus accounted for over three-quarters of Serie A’s €97m (6%) revenue growth in 2012/13, with aggregate revenues rising to €1,682m. Italian clubs continue to be heavily reliant on broadcast revenue, which represented 59% of aggregate league revenues in 2012/13, the highest proportion across the ‘big five’ leagues.

France’s Ligue 1 demonstrated the fastest rate of growth in euro terms, with a 14% (€161m) increase to €1,297m, driven entirely by Paris Saint-Germain. Whilst their total revenue grew by €178m, the remaining 19 Ligue 1 clubs suffered an aggregate fall of €17m.

The ‘big five’ leagues showed restraint in terms of wage cost expenditure in 2012/13, with only 25% of the cumulative revenue growth being absorbed by wage cost increases. Four of the five leagues reported static or improving wages/revenue ratios in 2012/13 (versus 2011/12) (Serie A 71% (74%); La Liga 56% (59%); Bundesliga 51% (51%); Ligue 1 66% (74%)), the exception being the Premier League, which saw wage costs grow by 8% to £1,783m (€2.1 billion). This resulted in a wages/revenue ratio of 71%, its highest ever level.

The Bundesliga and Premier League were the only two of the ‘big five’ to generate an operating profit in 2012/13, with the former setting a new record level for any football league, increasing its operating profits by €74m (39%) to €264m. Premier League clubs’ operating profitability reduced by £2m in local currency terms to £82m (€96m). The French and Italian leagues both recorded notable improvements in operating losses; Ligue 1’s €64m reduction saw it almost reach a break-even position (€3m operating loss), whilst a €107m improvement in Serie A (to €53m) halted seven seasons of deteriorating profitability.

Adam Bull, Senior Consultant in the Sports Business Group at Deloitte, commented: “The advent of UEFA’s Financial Fair Play Regulations, along with the interventionist measures taken by some of Europe’s domestic leagues, has led to a change of mindset for many clubs and the resulting improvements in operating profitability at several of the ‘big five’ leagues is an encouraging sign for the financial health of the game.”  

Other key findings from the Deloitte Annual Review of Football Finance 2014 include:

  • Broadcast revenue of €4,535m represented the largest component (46%) of the collective revenues of the ‘big five’ leagues, and will rise again in next year’s edition given the new Premier League and Bundesliga broadcast deals;
  • In 2012/13, Spain’s La Liga had the largest broadcast revenue distribution ratio between the highest and lowest earning clubs at around 7:1, the only league to operate an individual selling regime for broadcast rights. The equivalent ratios in the other leagues were broadly: Serie A 4.4:1, Ligue 1 3.7:1, Bundesliga 2.5:1, Premier League 1.5:1;
  • Commercial revenue of €3,393m represented 35% of the total revenue for the ‘big five’ leagues, and for the second consecutive year provided the impetus for the leagues’ cumulative growth, having accounted for 64% of the uplift;
  • Matchday revenue of €1,874m (19%) remained broadly flat, as disposable incomes of many European fans came under continued pressure;
  • Average league match attendances in 2012/13 fell by 5% in the Bundesliga (to 41,914) with all but three consistent clubs recording a decline in average attendances. La Liga also suffered a reduction in attendances (to 25,464). In contrast, Premier League attendances rose by 4% to 35,903 in 2012/13, a utilisation rate of over 95% and increased again in 2013/14 to 39,695 (a utilisation of almost 96%). Average attendances also rose in Serie A (22,591) and Ligue 1 (19,240), reversing the trend in both leagues over recent years;
  • Outside of the ‘big five’ countries, Russia (€896m), Turkey (€551m) and the Netherlands (€452m) once again have the largest revenue-generating leagues;
  • England’s Football League Championship is by far the world’s highest revenue-generating second tier competition, despite total revenue decreasing to €508m in 2012/13;
  • Outside Europe, Brazil’s Campeonato Brasileiro Série A is the leader for revenue generation with its clubs generating revenue in excess of €850m in 2013.

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About the Sports Business Group at Deloitte

Over the last 20 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 benchmarking or strategic business reviews, operational turnarounds, revenue enhancement strategies or stadium/venue development plans, business planning, market and demand analysis, acquisitions, due diligence, expert witness, audits or tax planning; we have worked with more clubs, leagues, governing bodies, stadia developers, event organisers, commercial partners, financiers and investors than any other adviser.

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