French teams dominate top 15 ranking of European rugby clubs
French rugby club Toulouse tops the list of Europe’s 15 biggest rugby union clubs, based on revenue, according to analysis published for the first time by the Sports Business Group at Deloitte.
The 2011 French champions generated £27.4m (€33.5m) in revenue during the 2009/10 season, followed by Clermont Auvergne (£19.5m (€23.8m)) and Leicester Tigers (£18.5m (€22.6m)) in third. By contrast, Leicester Tigers take top spot in the ranking by average attendance during the 2010/11 season, pushing its French rivals into second and third places.
Overall, the top 15 positions by revenue are dominated by French (11) and English clubs (four). The three other English clubs to be ranked in the top 15 by revenue are: Northampton Saints (11th: £12m), Harlequins (14th: £10.6m) and Gloucester (15th: £9.4m).
French and English clubs also dominate the top positions when ranked by highest average attendance, with eight and five clubs ranked in the top 15 places, respectively. However, whilst financial information on Irish clubs is not available, the strength of Munster (4th) and Leinster (6th) is evident by their high ranking by average match attendance.
Dan Jones, Partner in the Sports Business Group at Deloitte, comments: “The dominance of the French clubs in generating revenue is largely due to greater commercial income, primarily as a result of more lucrative sponsorship deals as opposed to bigger match attendance figures. Increasing revenue generation is critical for top clubs in a fiercely competitive pan-European, and indeed global, market for playing talent.”
In recent years, many of the top ranking clubs, by revenue and attendance, have been successful in attracting a greater number of occasional attendees by taking matches to larger venues, for example, Saracens to Wembley, Harlequins and London Wasps to Twickenham, Stade Français to Stade de France, Toulouse to the city’s Stade Municipal, and Toulon to the Stade Vélodrome in Marseille. Continuing to grow and engage this wider supporter base is the key to reaping further matchday and commercial revenue benefits.
Jones says: “Investment in the development of a club’s stadium facilities and community programmes can yield opportunities to drive matchday and commercial revenue by attracting and retaining these occasional attendees as regular home match goers.
“However, the ongoing challenge for all clubs is managing their cost base relative to revenue – a common issue for clubs within other sports. The growth of clubs’ costs throughout the professional era has matched or outstripped the impressive revenue growth and, whilst there is a welcome degree of regulatory control on the largest cost item (player salaries) through the salary cap in England and France, the vast majority of clubs are delivering operating losses year-on-year.”
In 2009/10, the combined Premiership club operating losses totalled £19.6m (€23.9m). Only Leicester and Northampton, the two highest revenue generating English clubs, delivered profits, highlighting the disparity between a club’s revenue generation and its profitability. In France, cost inflation from the pressure to succeed on the pitch has led to financial problems at a number of clubs recently, including Stade Français and Bourgoin.
Jones comments: “Managing a club’s cost base within its level of revenue generation is fundamental to the long-term health, sustainability and maturity of the club game. This is the toughest management challenge for any sports club.”
Notes to Editors:
The European Rugby Union Top 15 - 2009/10 revenue
|Position||Club||2009/10 Revenue (£m)||2009/10 Revenue (€m)|
|5||Racing Métro 92||17.2||21.0|
Source: DNACG, Companies House, Deloitte analysis
|Position||Club||2010/11 Average Attendance|
Source: LNR, PRL, Celtic Rugby, Deloitte analysis
Basis of Preparation
Revenue figures are extracted from club’s annual financial statements, reporting by the French League’s financial body, the Direction Nationale d’aide et de Contrôle de Gestion (DNACG), or other direct sources. Revenues cover the 2009/10 season, the period for which financial information for all clubs is available.
There are many ways of examining the relative size, wealth or value of sports clubs. For the purposes of this analysis, revenue has been used as the most easily available and comparable measure of financial performance.
Revenue excludes player transfer fees, value added tax and other sales related taxes. In a few cases adjustments have been made to total revenue figures to enable, in our view, a more meaningful comparison of the rugby business on a club by club basis. For instance, where information was available to us, significant non-rugby activities or capital transactions have been excluded from revenue.
Some revenue differences between clubs, or over time, will arise due to different commercial arrangements and how the transactions are recorded in clubs’ financial statements; or due to different ways in which accounting practice is applied such that the same type of transaction might be recorded in different ways.
We have not performed any verification work or audited any of the information contained in the clubs’ financial statements or other sources for the purpose of the publication.
For the purpose of the international comparisons, all figures for the 2009/10 season have been translated at 30 June 2010 exchange rates (£1 = €1.2214). Comparative figures have been extracted from previous editions of the Money League.
Attendance figures are for the 2010/11 season and cover club’s average home domestic league match attendance in its regular home stadium. The average figures do not include domestic league play-off, European Rugby Cup, or other competition matches. In some cases, clubs have hosted some matches in larger stadia. Attendance figures in respect of these matches are not included in the averages above.
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.
For further information on our services you can access our website at www.deloitte.co.uk/sportsbusinessgroup
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