Annual Review of Football Finance 2021

Key findings from Deloitte’s 30^th Annual Review of Football Finance:

• The combined European football market contracted by 13% in 2019/20 as overall revenues fell by €3.7bn to €25.2bn, the first reduction in revenues since the global financial crisis in 2008/09;
• The ‘big five’ European leagues generated €15.1bn in revenue in 2019/20 (€17bn in 2018/19), an 11% decrease from the previous year;
• The Bundesliga reported the lowest fall in total revenue - 4% - and was the second highest revenue generating league of the ‘big five’ in 2019/20, reporting revenues of €3.2bn and narrowly surpassing La Liga (€3.1bn);
• Italy’s Serie A reported revenues of €2.1bn, marking an 18% decline and France’s Ligue 1, the only ‘big five’ European league to cancel its season in response to COVID-19, reported revenues of €1.6bn a 16% decline;
• As reported by Deloitte in June, Premier League clubs’ revenue fell by 13% from a record €5.8bn in 2018/19 to €5.1bn in 2019/20, the first drop in total revenue in Premier League history and the lowest total revenue level since 2015/16.

The European football market as a whole contracted 13% to €25.2bn in 2019/20 (€28.9bn in 2018/19) as a result of the COVID-19 pandemic, according to the 30^th Annual Review of Football Finance from Deloitte’s Sports Business Group.

In absolute terms the ‘big five’ European leagues – representing a record high 60% share of the European football market - bore the most significant financial impact with combined revenues declining by 11% (€1.9bn) to €15.1bn.

Germany’s Bundesliga reported the smallest fall (4%, €137m) in total revenue as the season was completed pre-financial year-end and there were only minimal rebates payable to broadcasters. The Bundesliga generated revenues of €3.2bn and surpassed La Liga (€3.1bn) as the second highest revenue-generating football league in 2019/20 after La Liga revenues fell 8%. We expect that La Liga will revert to being the second highest revenue generating league in 2020/21.

Italy’s Serie A, with revenues of €2.1bn (a 18% decline) and France’s Ligue 1 (the only ‘big five’ European league to cancel its season in response to the pandemic), with revenues of €1.6bn (a 16% decline), complete the €15.1bn revenue total achieved by the ‘big five’ European leagues.

Whilst the aggregate revenues of the ‘big five’ leagues decreased by 11% to €15.1 billion in 2019/20, total wage costs remained flat.

Dan Jones, partner and head of the Sports Business Group at Deloitte, explained: “It will be a number of years before the full financial impact of the COVID-19 pandemic on European football is known. But we’re now beginning to see the scale of the financial impact that the pandemic has had on European clubs.

“It should be noted that while it is now 16 months since the pandemic struck in Europe, the analysis in this report focuses on the 2019/20 financial year and hence only accounts for, in most cases, three months of COVID-19 impact. The suspension of leagues led to the misalignment of season completion and typical financial reporting periods across England, Spain and Italy. This will lead to some elements of revenue and costs related to the 2019/20 season being recognised in the financial year ending 2021, and hence next year’s edition of Deloitte’s Annual Review of Football Finance.” 
 

Shock from COVID-19 hits profitability across the Premier League

As reported by Deloitte in June, Premier League clubs’ combined revenues fell by 13% from a record €5.8bn in 2018/19 to €5.1bn in 2019/20, the first drop in total revenue in Premier League history. Despite this, in revenue terms, the Premier League was still 60% larger than its nearest competitor, the Bundesliga, although this gap has decreased from 73% in 2018/19.

Due to the relatively fixed nature of Premier League clubs’ costs and the decline in revenue, collective operating profits were almost completely wiped out. Premier League clubs’ average wages to revenue ratio also increased to a record 73%. The increase in cumulative pre-tax losses was stark, rising to €1.1bn in 2019/20, an increase of over €910m compared to 2018/19, with 15 clubs reporting pre-tax losses.

Jones added: “What we can see clearly is the relatively fixed nature of elite clubs’ cost base and in particular wage costs. Due to the multi-year structure of player contracts, clubs have found it very difficult to offset the shock to revenue caused by COVID-19 by reducing wage costs. It will be interesting to see how the balance of wages and revenues develops in 2020/21 and beyond, and whether the hitherto seemingly inexorable growth in wages slows, stops or reverses.”
 

An uncertain landscape

The impact of the COVID-19 pandemic on matchday revenue in the 2019/20 financial year is clear,  but the impact on the two largest revenue streams of the ‘big five’ leagues, broadcast (which makes up 51% of 'big five' league club’s revenues) - and commercial (36%), remains more uncertain.

Sam Boor, senior manager in the Sports Business Group at Deloitte, added: “Since COVID-19 changed the landscape of top-level European football we have seen developments in the broadcast rights market across a number of ‘big five’ leagues. The Premier League chose to renew their agreements with existing domestic partners at reportedly the same value in what may prove to be an astute decision, while Serie A reportedly agreed a 5% reduction in value in their new domestic deal. Other leagues, including Ligue 1, have experienced more turbulence. We will find out over the coming seasons if these examples of flat renewals and declines are a trend that is here to stay, or a temporary pause.”

Jones concluded: “Despite the uncertainties of the past year, football - and the public interest in it - has shown great resilience. We are hopeful that the 2021/22 season will be a step towards normality, resulting in a strong recovery in revenue terms across the coming seasons.”

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Contact:       Lizzie Tantam / Sunita Ghalley
                      020 7007 2911 / 020 7007 6612
                      ltantam@deloitte.co.uk / sghalley@deloitte.co.uk