Deloitte Annual Review of Football Finance 2014
Cumulative revenue of Europe’s ‘big five’ leagues grew by 5% in 2012/13 to €9.8 billion
Singapore—9 June 2014, 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: