Deloitte Football Money League 2011
Welcome to the 14th edition of the Deloitte Football Money League, in which we profile the highest earning clubs in the world’s most popular sport. The Money League is published nine months after the end of the 2009/10 season, and is therefore the most contemporary and reliable analysis of clubs’ relative financial performance.
There are a number of methods that can be used to determine clubs’ relative size – including measures of fanbase, attendance, broadcast audience, or on-pitch success. Indeed the relative wealth of certain clubs’ owners has filled many column inches in recent times. However, the Money League focuses on the clubs themselves, comparing revenue from day to day football operations which we believe is the best publicly available financial comparison.
Whilst last year’s Money League, covering the 2008/09 season, showed football’s top clubs’ relative resistance during the early stages of the economic downturn, it wasn’t until the 2009/10 season, which is the focus of this edition, that we expected to see the full impact on clubs.
We continued to assert that the game’s top clubs would be well placed to meet these challenges given their large and loyal supporter bases, ability to drive broadcast audiences, and continuing attraction to corporate partners.
This was more than borne out by clubs’ revenue performance in 2009/10. The combined revenues of the top 20 Money League clubs surpassed €4 billion for the first time, with a total of €4.3 billion being a 8% increase on the previous year. All bar three of the top 20 clubs achieved revenue growth in 2009/10.
The established large and loyal supporter bases and historic on-pitch success underpin the brand strength of football’s top clubs. These characteristics mean that a handful of clubs continue to drive the highest revenues and populate the top positions within the Money League.
The same ten clubs populate the top ten places in the Money League for the second successive year, with the top six ranking identical to last year. Six of those top ten have been in our Money League top ten in each of the last ten years. Each of this year’s top ten clubs has been in for at least eight of the last ten years and none has ever dropped below 13th in that period. This shows both the enduring strength of these clubs and the scale of the challenges to those aspiring to break into that elite group. Nonetheless, we expect to see one or two clubs make that step in the next year or two.
Congratulations to Real Madrid who head the Money League for the sixth successive year. Los Blancos will doubtless be confident that they can match Manchester United’s eight year hegemony enjoyed from 1996/97, the first edition of the Money League, through to 2003/04.
FC Barcelona is placed second in the Money League completing a Spanish one-two for the second successive year. Whilst the Catalan club could not quite match its domestic double and UEFA Champions League winning season of 2008/09 in 2009/10, it retained the La Liga title and added the FIFA World Club Cup and UEFA Super Cup.
It is Barca’s on-pitch success that has underpinned its revenue growth in recent years. Conversely, Real’s recent revenue growth has been achieved despite relatively modest on-pitch performance by the club’s own high standards, particularly in the Champions League.
Whilst Real held a €40m revenue advantage over Barca in 2009/10, Barca’s revenues should exceed €400m in the next edition of the Money League, particularly given the club’s new shirt sponsorship deal with the Qatar Sports Investment Agency which will deliver revenue from 2010/11. Hence, we expect a battle between Spain’s two Superclubs for top spot in the Money League for the next few years at least, with on-pitch performance likely to be a key driver.
Promotion and relegation
Whilst Spanish clubs claim the top two spots in the Money League, England retains the largest representation from any single country, again with seven clubs. This strength in depth is driven by the scale and relatively even distribution of the Premier League’s centrally negotiated broadcast monies and the success of English clubs in generating higher matchday revenues than their continental competitors.
As in last year’s edition, all of this year’s 20 clubs are from the ‘big five’ European leagues with Germany and Italy contributing four clubs each, Spain three clubs, and France two clubs.
VfB Stuttgart and Aston Villa return to the top 20 after a one year and five year absence respectively. Atlético de Madrid’s success in winning the reformatted and renamed UEFA Europa League, Europe’s second tier clubs competition, allow it to claim 17th position, its highest position since the 12th place secured in our first edition of the Money League back in 1996/97.
Two German clubs, Werder Bremen and Borussia Dortmund, drop out of this year’s top 20, continuing a recent trend of two or three clubs being relegated from the top 20 each year, with on-pitch performance and particularly participation, or a lack of it, in the Champions League being a key driver of a club’s promotion or relegation from the top 20. Fourteen of the top 20 clubs participated in the Champions League in 2009/10 with six clubs participating in the Europa League from the Group phase onwards, four of whom parachuted in from the top-tier competition. Four clubs – Manchester City, Tottenham Hotspur, Schalke 04, and Aston Villa – didn’t participate in any European competition from the group phase onwards.
Movers and shakers
So who are the biggest movers in this year’s list? Manchester City has climbed the most places, up nine to eleventh position, even though the club did not participate in European competition. Whilst its revenue growth in 2009/10 has been due to commercial revenue increases, the club’s owners will be hoping the heavy investment in the playing squad will translate into onpitch success, particularly in qualifying for the Champions League. Should this be achieved, Manchester may join Milan and London in having two clubs in the Money League top ten in future editions.
A more immediate challenger to the top ten is Tottenham Hotspur, who climb three places to 12th in this edition. The club’s continued on-pitch improvement allowed it to finish fourth in the Premier League in 2009/10 and qualify for this season’s Champions League. Whilst there is a gap of over €50m between them and tenth place Juventus, the revenue that Spurs will receive from participating in Europe’s top clubs’ competition in 2010/11 will provide a substantial boost. Juve’s failure to qualify for the Champions League in 2010/11 will likely mean that it drops out of the top ten next year.
Perhaps surprisingly, Inter’s treble winning season – lifting the Scudetto, Coppa Italia, and Champions League – did not allow it to move up the Money League with the club retaining ninth position despite a €28m (14%) uplift in revenue. The club is close behind Liverpool and its Milan neighbours, but its non mover status emphasises the challenges it, along with most Italian clubs, has in addressing matchday and commercial revenues.
Clubs from the ‘big five’ European leagues also occupy the vast majority of positions immediately below the top 20 as the table below shows.
|FC Girondins de Bordeaux||€102.8m|
|West Ham United||€87.6m|
What can we expect in future years? New, bigger central overseas broadcast deals, from 2010/11 should allow English clubs to retain the highest representation in the Money League in forthcoming years.
Whilst Inter, AC Milan and Juventus retained top ten positions in this edition, and Serie A’s return to collective selling from 2010/11 is an encouraging sign that Italian football is in the early stages of much needed reform, more action is necessary at an accelerated pace particularly in relation to stadia, if Italian clubs are not to lose further ground against their European peers. It is only five years since two Italian clubs, Juventus and AC Milan, claimed top five positions in the Money League.
The much discussed implementation of UEFA’s Financial Fair Play Regulations from 2013/14 will not impact on clubs’ revenue generation, with the key principle underlying the regulations being that clubs do not spend more than they earn. Indeed the regulations should help encourage clubs to identify and realise sustainable increased revenues.
In any event, in principle, it is logical to expect those clubs earning the most to be able to invest the most in their playing squads and this to translate into on-pitch success and hence a continued stasis amongst clubs in terms of the Money League rankings, particularly towards the top of the list.
In our previous publications, we have demonstrated that there is a strong correlation between a club’s wage bill and on-pitch success, particularly within domestic competition. Indeed this year’s Money League clubs have won 43 of the 50 domestic league titles available in the ‘big five’ countries over the past ten years. The link is less strong at European competition level although only one club from outside the Money League top ten – Porto in 2003/04 – has won the Champions League in the past ten years.
In the positions immediately below first place in domestic leagues, the all important European qualification places, there is more variability in clubs’ finishing position although in general those clubs further up the Money League have been the most consistent qualifiers for the Champions League.
In future, we expect a continuation of the pattern of the top positions in the list being relatively resistant to movement of clubs, and two or three clubs dropping in and out of the top 20 rankings each year, largely due to on-pitch performance.
Our focus this year
In addition to our usual profiles of the top 20 clubs we include two feature articles in this year’s publication. The first assesses each of the three key revenue streams, listing the top 20 clubs for each, whilst comparing and contrasting these lists with the overall top 20. With the return of Serie A to collective selling from 2010/11, Spain stands alone as the only ‘big five’ league to retain an individual selling regime, although discussions are currently taking place regarding the future distribution of broadcast revenues with the rights selling method potentially open for future discussion. Our second feature article therefore looks at the collective and individual sale of broadcast rights, the relative impact of each regime on clubs’ revenue generating ability, and the impact on both domestic competition and the Money League.
The Deloitte Football Money League was compiled by Dan Jones, Austin Houlihan, Richard Battle, Adam Bull, Martyn Hawkins, Simon Hearne, Rich Parkes and Alexander Thorpe. Our thanks go to all those who have assisted us, inside and outside the Deloitte
Dan Jones, Partner
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