Deloitte Football Money League 2009 podcast transcript

Speaker key
RB Interviewer Rachel Burden
DJ Interviewee Dan Jones

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RB Hello and welcome to this Deloitte podcast; I’m Rachel Burdon and in this interview I’ll be discussing the Deloitte Football Money League 2009 with Dan Jones, Head of the Sports Business Group at Deloitte. This is the 12th year of the publication profiling the richest 20 clubs in the world’s most popular sport - the Deloitte Football Money League is the most contemporary and reliable analysis of clubs’ relative financial performance. You can download a copy of Money League on Deloitte’s website; deloitte.co.uk/sportsbusinessgroup where you can also find reports from previous years. So Dan, what is the big story this year?

DJ Well, the big story this year is that pretty much all of our top 20 are showing revenue growth on the year before, but Real Madrid remain at the top. The top three is the same as it was last year, the biggest clubs with the biggest global support; Real Madrid; Manchester United; FC Barcelona. As you get further down the list it’s really about Champion’s League and success in Champion’s League moving people up and down the table.

RB Now last year you predicted that the English clubs would dominate, maybe even making up half the list; has this been the case?

DJ Well, it shows the danger of making predictions, and we did think that the English clubs would dominate and, and make up as many as ten on the list; what we didn’t predict was what would happen with exchange rates, so due solely to exchange rates there’s only seven English clubs in the list - but that’s still more than any other country. West Ham, Aston Villa, Everton can count themselves very unlucky to have missed out, because had the exchange rates stayed where they were, they would have appeared in the top 20 as well.

RB The 2007-8 season was obviously a very successful one for Manchester United on the pitch, but how has this impacted on their position on the Money League?

DJ Well, they’ve stayed in the same position of second but, again, they’re a little bit of the victims of the exchange rate because, again, they would have been top at the old exchange rates, and their success on the pitch has totally driven that; the highest match day revenues of any club in our Money League; higher broadcast revenues both because of the Premier League deal and increased distributions from UEFA for winning the Champion’s League; much improved commercial performance, so a really, really strong performance all round.

RB So which other clubs have shown the greatest increases in revenue, or moved up the most?

DJ Well I think in absolute terms Bayern Munich is probably the most impressive performance; they now fully own their stadium, the Allianz Arena in Munich, and they’ve generated a lot of extra revenue from that. All the English clubs have shown increased revenue in, in sterling terms - the Premier League deal being, of course, a key part of that. And then, as I said, further down the list it’s really about Champion’s League football and the affect that has, so we’ve got in the top 20 Stuttgart and Fenerbahce, the first Turkish club ever to make it to the top 20, so you can see the effects there of, of those clubs coming through. I guess the most worrying country for us at the moment is Italy; Italy’s about to go back over to collective selling of TV rights and, at the moment, their teams are sliding down the table even though they’re allowed to sell their TV rights individually. We look at it and think that in a couple of years time it could be that there’s not even an Italian club in the top 10, and that would be a big turn around from where we were a few years ago.

RB It’s often reported that Manchester City are the world’s richest club, but they’re only 20th in the Money League; why is this?

DJ Well, the Money League’s based on revenue from the football club operations and that’s the best available measure of financial performance, rather than the wealth of the owners, so the challenge for Manchester City really is to take that owner’s wealth that they’ve got, turn that into better on pitch performance and that, in turn, will lead to off pitch revenues.

RB Obviously the economic situation is very different now to a year ago, so how has that impacted on the list?

DJ Well, the list is largely before the impact of the downturn - so it covers the 2007/2008 season - so we’ve still got teams showing revenue growth. The most noticeable impact from the wider economy is, as I said, the change in exchange rates, and that may hurt the English clubs a little bit in terms of their placing in the list - and it also makes it more difficult for them acquiring players from overseas. However, even at this moment it’s quite helpful to them, I think, in being out in the market trying to sell their TV rights overseas, because the amount of dollars or euros they’ll get from overseas broadcasters will translate back into more pounds in their pockets over here. So, yes, the economic downturn - limited effects so far this year.

RB So how are the Money League clubs equipped to deal with the economic downturn; what sort of impact is it likely to have in the next few years?

DJ Well, I think we’re seeing a general theme of football clubs being pretty resistant to the recession; not, not immune to it, not complacent about it, but certainly resistant to it. So, as I said, in the League we’ve got at the moment we can only really see the effects of the exchange rate; I think when we produce next year’s League we’ll start to see some of the initial signs of the impact of recession, but we won’t actually see the full impact until 2011 when we’re including the effects of season ticket renewals, corporate hospitality and so on for a period that really includes the whole of the downturn. But I think that what we will see, and we have seen across Europe, is that football is holding up pretty well; the record levels of activity in the transfer window; Premier League rights deal renewed at a, a very strong value, and that theme being repeated across Europe; attendance is holding up well, as well. So I do think that football brings a bit of light into peoples’ lives when the economy is looking quite dark, and I believe therefore that the clubs will prove to be reasonably resilient.

RB Dan Jones, thank you very much - and that’s it for now; remember you can get your own free copy of the Deloitte Football Money League 2009 by going to deloitte.co.uk/ sports businessgroup. Until next time, thanks very much for listening.

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