The 31st edition of Deloitte’s Annual Review of Football Finance - the leading independent review of the business and finances of European professional football - chronicles the 2020/21 season, a season impacted by COVID-19 restrictions which caused significant disruption.
With matches played behind closed doors and stadia empty for the majority of the season, European clubs were faced with unprecedented challenges.
The Annual Review of Football Finance 2022 analyses the legacy of the disruption and charts the ‘new dawn’ ushered in by the actions taken to mitigate it, while providing an outlook on the industry’s efforts to build financial sustainability across European football for the long-term.
Despite an almost complete loss of matchday revenue in the 2020/21 season, the European football market grew defiantly in revenue terms by 10% to €27.6 billion, boosted by the UEFA EURO 2020 tournament and deferred revenue from the postponed 2019/20 season.
This indicates a significant recovery in revenue terms, with the bounce back to pre-COVID revenue levels projected to be achieved in the 2021/22 season.
In the aftermath of a record-breaking UEFA Women’s EURO and in anticipation of a landmark football season that will include the first ever winter FIFA World Cup and a break across all of the ‘big five’ leagues, Deloitte’s 31st Annual Review of Football Finance assesses the financial performance of European clubs within the tumultuous 2020/21 season and charts the outlook for future growth.
As the Premier League celebrates 30-years since the start of its first ever season (1992/93), Deloitte has charted its success throughout, tracking remarkable growth in the financial scale and global appeal of the competition.
In 2020/21 average revenue per Premier League club exceeded the collective 1992/93 total for the fourth time, with total revenue up over 2,400% at £4.9 billion.
Entering its fourth decade, there is an optimistic outlook as Premier League clubs’ revenue is expected to exceed £6 billion in the 2022/23 season as a result of the new broadcast deals, the return to full stadia and improved commercial deals.
In 2020/21 the ‘big five’ European leagues generated €15.6 billion in aggregate revenue, up 3% relative to the prior season, but significantly below revenues observed prior to COVID-19 (€17.0 billion in 2018/19).
The theme of polarisation has been ever present in European football and has been exacerbated by the impact of COVID-19. The Premier League today may be further ahead of the competition than ever before. Concerningly, when excluding the Premier League, the ‘big five’ reported increased total operating losses during the year, increasing from €461m to €901m.
Now more than ever clubs need informed financial decisions to be taken to ensure the recovery from COVID-19 is as effective as possible.
As the women’s game enters a rapid growth era, we are witnessing women’s football clubs and leagues breaking the mould, forging a system of unique identities, fanbases and business models, unconstrained by the legacy structures of the men’s game.
The game’s stakeholders are poised to benefit from a windfall that will facilitate further investment in professionalisation and commercialisation, that has the potential to improve profitability.
The women’s game now stands on its own as a proudly differentiated product; and we will increasingly see the global football industry looking to learn from its achievements.
Premier League clubs’ revenues increased by 8% to c.£4.9 billion in 2020/21 following the previous season’s drop, which was the first year-on-year fall in total revenue in the Premier League’s history.
This increase is largely due to a c.£1 billion (43%) increase in broadcast revenue, owing to rebates and deferrals in the previous (19/20) season. The impact of this on overall revenue, however, was diminished by the absence of fans for the majority of the season, which resulted in a loss of over £0.5 billion in matchday revenues.
With the return of full stadia, along with new broadcast deals and improved commercial deals, the outlook for future Premier League clubs’ revenues is optimistic, with overall revenue projected to surpass £6 billion in the 2022/23 season.
This resilience and the greater need for and reception to, private investment, alongside a renewed focus on financial sustainability, has led to significant investment into football at both league and club levels.
In 2021, the number of transactions was more than the prior two years combined. 2022 has seen a continuation of this uplift of activity, with investments in eight ‘big five’ clubs taking place so far.
The influx of investment and changes of ownership in sport has received a mixed response from fans and other stakeholders. Concerns can relate to reputational issues, expectations of future sporting performance and risks surrounding a club’s financial sustainability.
Responsible and sustainable investment into football clubs - defined by an ownership strategy that protects long-term financial and operational viability, whilst also balancing the desire to be competitive on-pitch - is of paramount importance.
All three of the EFL’s divisions saw aggregate club revenues fall in 2020/21. League One clubs were worst affected with aggregate revenues down 22%, compared to a reduction of 12% and 4% in the Championship and League Two respectively.
This decline meant average wages surpassed average revenue among League One clubs for the first time, while this was the case for the fourth consecutive year in the Championship.
With over 90% of Championship clubs operating at a loss in 2020/21, it’s clear that many will need to improve the future balance between their costs and their revenues, encouraged by the EFL’s regulations and clubs’ obligations under the loan schemes initiated in 2020. There now can be no doubt that significant change is required to drive long-term sustainability, without the need for continual owner funding at this level.
In November 2021 Tracey Crouch MP delivered her report as Chair of the Independent Fan Led Review of Football Governance (the Review).
The Review produced 10 core and 47 more detailed recommendations. At the heart of these was the recommendation for an independent regulator to set rules to govern the business of English football with appropriate licensing, investigatory and enforcement powers.
Continued political will to appoint and empower the regulator and hard work in collaboration with English football’s key stakeholders on the details of regulation will enable the game to address its biggest challenges, build upon its undoubted success and safeguard the future of the game.