Annual Review of Football Finance 2020
World in motion
Record revenues reported for 2018/19 for European football clubs ahead of the financial impact of COVID-19.
2018/19 season - Key findings from Deloitte’s Annual Review of Football Finance 2020:
- The European football market generated €28.9bn in revenues in the 2018/19 season, according to Deloitte’s Annual Review of Football Finance;
- The ‘big five’ European leagues generated a record €17 in revenue in 2018/19, a 9% increase from the previous year;
- The ‘big five’ leagues generated aggregated operating profits of €1.4 billion for the 2018/19 season, an increase of 7% on the prior year.
- Premier League clubs’ revenues rose to more than €5.9 billion, an increase of 7%, driven by growth in UEFA distributions to English clubs;
- Clubs in Spain’s La Liga generated combined revenues of €3.4bn in 2018/19, the second highest absolute growth amongst the ‘big five’ leagues, surpassing the Bundesliga (€3.3 billion) in terms of revenue;
- In Serie A (€2.5 billion) and Ligue 1 (€1.9 billion), strong revenue growth was noted, with 11% and 12% uplifts respectively.
The 2018/19 season saw European football scale new financial heights
The ‘big five’ European leagues generated a record €17bn in revenue in 2018/19, a 9% increase from the previous year, according to the 29th Annual Review of Football Finance from the Sports Business Group at Deloitte.
The European football market as a whole generated a record €28.9 billion for the year covering the 2018/19 season. Growth was driven by the ‘big five’ European leagues, which benefitted from receiving the majority of an additional €700m of distributions from UEFA to clubs in their competitions.
Premier League clubs’ combined revenues passed €5.9 billion in the 2018/19 season, a year-on-year increase of 7%. In revenue terms, the Premier League was 73% larger than its nearest competitor, Spain’s La Liga.
Premier League clubs’ revenue growth in 2018/19 enabled additional resources to be spent on playing talent. The Premier League clubs’ overall wages-to-revenue ratio increased to 61%, up from 59% the previous season. Meanwhile, operating profits decreased by 5% in 2018/19 to €935m - still the third highest level ever recorded. However, Premier League clubs recorded a pre-tax loss of €187m in 2018/19 – a c.€670m reduction year-on-year – owing to falling player transfer profits and growing amortisation charges.
Revenue polarisation between and within European football leagues continued to grow. This trend is likely to be exacerbated by the COVID-19 pandemic, as the biggest clubs are likely to have the most contractually protected revenues, whilst smaller clubs rely more heavily on matchday revenue and single season commercial agreements.
Clubs in Spain’s La Liga generated combined revenues of €3.4bn in 2018/19. The reported revenue growth of over €300m (10%) in the 2018/19 season, the second highest absolute growth amongst the ‘big five’ leagues, meant La Liga surpassed the Bundesliga (€3.3 billion) in terms of revenue.
Bundesliga clubs still achieved impressive revenue growth of €177m (6%) for the 2018/19 season, due to the uplift in broadcast revenues (19%) as the league benefitted from a contractual annual domestic rights revenue increase.
However, the earlier return to play of matches in the Bundesliga during the disrupted 2019/20 season will likely see the German league report higher revenues than La Liga in 2019/20. La Liga is expected to return to being Europe’s second highest revenue generating league from 2020/21, due to increased broadcasting revenues.
In Serie A (€2.5 billion) and Ligue 1 (€1.9 billion), strong revenue growth was noted, with 11% and 12% uplifts respectively. In Italy, the start of a new three-year international media rights deal resulted in broadcast revenues increasing by 11%. French clubs generated an additional €110m from broadcast income as club performance improved in UEFA competitions.
2019/20 – a season like no other
The Deloitte Sports Business Group’s analysis anticipates that the disruption to the 2019/20 season will reduce Premier League clubs’ revenues in the 2019/20 financial year by approximately €1.1 billion. Of this, almost 50% is permanently lost primarily due to the loss of matchday revenues and rebates on broadcast and commercial contracts from games being delayed and played behind closed doors. The remainder will be deferred until the 2020/21 financial year, due to the delay of almost a quarter of the season beyond 30 June. As a consequence, and despite anticipated potential continued disruption into the 2020/21 season, the 2020/21 financial year may see record-breaking levels of revenue.
Dan Jones, partner and head of the Sports Business Group at Deloitte, explained: “We expect the ongoing COVID-19 pandemic to cause significant revenue reduction and operating losses across European football in the current season’s financial results. Clubs are having to weather multiple financial impacts, including rebates or deferrals of commercial and broadcast incomes, as well as the loss of match day income and other event-related revenue.
“Football returning – in a safe and sensible way - is clearly important to limiting the financial impact that the pandemic has had. Leagues across Europe have been responding in different ways and at different paces. The success of each league’s return, and the strength of each one’s relationships with broadcasters and commercial partners, will have a potentially significant and lasting impact on the financial strength of clubs and leagues.
Jones continued: “Nonetheless, we forecast that the restart plans for the Premier League and a number of its peers will cause a rapid recovery in financial results as some 2019/20 broadcast revenues are pushed into the 2020/21 financial year, which may result in a bumper revenue year.
“Much remains uncertain, particularly around the timing and scale of the return of fans to stadiums and the impact on commercial and broadcast partners’ wider businesses. The football industry will be hopeful that a V-shaped recovery and a return to relative financial normality for the 2021/22 season is possible.”
Beyond the big five
Beyond the 'big five' European football leagues, the Russian Premier League (RPL) maintained its position as the sixth-richest football league, despite a revenue decline, in Euro terms, of €61m (8%). The Turkish Süper Lig reported limited revenue growth of 2% in Euro terms and marginally closed the gap to the Russian Premier League.
Leagues in Belgium, the Netherlands and Austria saw significant increases in revenues in 2018/19. Belgium's Jupiler Pro League clubs achieved revenue growth of 16% to €344m, driven by growth in broadcast revenue as Belgian clubs benefited from an improved collective performance in UEFA club competitions compared to 2017/18.
The 2018/19 season saw revenues increase by 20% across the Dutch Eredivisie clubs, while the Austrian Bundesliga expanded the number of competing teams to 12, growing revenues by 45% to €256m.
Tim Bridge, director in the Sports Business Group at Deloitte, added: “Whilst the 2018/19 season saw growth across many of Europe’s smaller leagues, the impacts of COVID-19, particularly on those leagues with a higher reliance on matchday revenue, will present a major challenge.”
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