Deloitte’s Annual Review of Football Finance 2023

• The European football market grew revenues by 7% in 2021/22 to €29.5bn with the full return of fans to stadia; 
• The ‘big five’ European leagues grew by 10% to €17.2bn, outperforming the pre-pandemic benchmark of €17bn in 2018/19; 
• Wage costs across the ‘big five’ rose by 15% from 2018/19 to €12.3bn in 2021/22, causing aggregate operating profits to decline by €1.8bn since 2018/19 to a loss of €324m in the 2021/22 season;
• Revenue growth in the Premier League continued to outpace that of the ‘big five’ leagues, with clubs reporting a 12% rise in overall revenues in the 2021/22 season, to a record aggregate revenue of £5.5bn; 
• Premier League clubs’ operating profits (excluding player trading) totalled £459m in 2021/22, down £1m on the previous season; 
• Championship clubs’ wage costs exceeded revenues for the fifth-consecutive year, with a wages/revenue ratio of 108%.

The European football market saw revenues grow by 7% to €29.5bn in the 2021/22 season (€27.6bn in 2020/21), according to the 32^nd Annual Review of Football Finance published by Deloitte’s Sports Business Group. Revenue growth was driven by record matchday and commercial revenues in the 2021/22 season, following the lifting of pandemic restrictions.

Revenue in the ‘big five’ European leagues - the Premier League, Bundesliga, La Liga, Serie A and Ligue 1 - grew by 10% to €17.2bn, outperforming the pre-pandemic benchmark of €17bn in 2018/19. 

Tim Bridge, lead partner in Deloitte’s Sports Business Group, said: “Topline figures show that European football has emerged resiliently from its most challenging period to date. Following the lifting of COVID-19 restrictions, fans’ pent-up demand gave rise to record matchday and commercial revenues across Europe. However, with operating profits declining by €1.8bn since 2018/19, it’s clear that overall recovery is still a work in progress.”

Europe’s premier leagues

The Premier League continued to outpace the competition and entrench itself as the market leader, with these clubs reporting a 12% rise in overall revenues in the 2021/22 season, culminating in a record aggregate revenue of €6.4bn (£5.5bn). 

La Liga revenues remain at approximately half that of the Premier League, despite La Liga clubs’ total revenue increasing by 11% to €3.3bn in the 2021/22 season. The relaxation of COVID-19 restrictions towards the end of 2021 helped Spanish top-tier clubs generate total matchday revenues of €409m in 2021/22, a €353m increase on the prior season and the main growth driver of clubs’ combined revenue. 

Second to La Liga, total revenue generated by Bundesliga clubs grew 5% to €3.1bn in 2021/22, as a result of improved matchday revenues (€254m increase) and commercial revenues (€169m increase).

Following a fall in value of domestic and international broadcast deals, Serie A was the only ‘big five’ league to record a decrease in aggregate revenues in 2021/22, as total revenue fell 7% (€171m) to €2.4bn. In contrast, Ligue 1 clubs experienced the greatest percentage growth in aggregate revenues of the ‘big five’ leagues in 2021/22, increasing 26% (€412m) to a record high of €2bn. This growth was predominantly driven by new commercial deals and a post-pandemic uplift to matchday revenues.

Overall aggregate revenue growth across the ‘big five’ was outpaced by a 15% rise in wage costs, from 2018/19 to €12.3bn in the 2021/22 season, causing operating profits to decline by €1.8bn since 2018/19. ‘Big five’ clubs reported a loss of €324m in the 2021/22 season, although this was a slight improvement on the 2021/22 season (a loss of €400m).

Bridge added: “The focus for all clubs must now shift to ensure long-term financial sustainability across the football system, and the introduction of new regulations across European football are appropriately timed to support this. Record growth in the Premier League continues to increase revenue polarisation between and within European football leagues, and every league faces new challenges brought by increased competition, regulation and the strain of a challenging macroeconomic climate.

“With the gradual introduction of UEFA’s Financial Sustainability Regulations from 2022/23, European clubs and leagues are set between the crossroads of some of the most pivotal regulatory changes that the game has ever seen, and a wave of investment into global football in an attempt to challenge the established system. And with emerging leagues looking to grow their offering and secure the best in on-pitch talent, European clubs’ future may be dependent on how sound their financial foundation will be and whether they can use that to remain competitive and relevant.”

Premier League revenue growth driven by returning fans

The 12% rise in Premier League clubs’ revenue in the 2021/22 season is largely attributable to record matchday revenue as fans returned to stadia, alongside commercial revenue also reaching an all-time high.

Matchday revenue for the English top-tier increased to £763m in 2021/22, an increase of £732m on the 2020/21 season, which was played behind closed doors. This also surpassed pre-pandemic levels of £684m in the 2018/19 season, with average league attendance at an all-time high (39,950). Commercial revenue also benefitted from fans’ heightened appetite for the game after enforced time away, increasing by £245m (16%) to reach a new high of £1.7bn.

Total wage costs increased for the second-consecutive year in 2021/22, rising 6% to £3.6bn. Seven of the 17 consistent clubs reported a reduction in wages.

This wage growth (£192m) was outpaced by the increase in revenue (£586m), resulting in the league’s wages/revenue ratio falling for the second-consecutive season (67%, down from 71%). Despite this, Premier League clubs’ average wages/revenue ratio remains above pre-pandemic levels (2016/17 to 2018/19 average: 58%).  

Clubs’ operating profits (excluding player trading) totalled £459m in 2021/22, down £1m on the previous season which had seen an increase for the first time in four years. Despite aggregate revenue growth (£586m) outpacing wage increases (£192m), a rise in operating expenses (£395m) contributed to a net reduction in operating profits. Cumulative losses of Premier League clubs were £607m in 2021/22, a significant fall from the 2017/18 season where pre-tax profits stood at £427m.

Premier League clubs’ net debt decreased by 34% to £2.7bn (20/2021: £4.1bn) at the end of 2021/22, with the acquisitions of Chelsea and Newcastle United by new owners a reason for this reduction.

This year’s review also marks the first time that aggregate revenues for Women’s Super League (WSL) clubs have been reported in a formal way. Deloitte’s analysis found that WSL clubs generated £32m in aggregate revenue in the 2021/22 season, up from £20m in the previous season. The significant 60% rise was driven by increases in both broadcast and commercial revenues. 

Bridge continued: “Growing international interest and the commercial prowess of playing in the English top-flight continues to drive revenue growth. As new owners join the top-tier and cost regulations continue to evolve, sustainable operating, funding models and acting with integrity as the custodians of a football club should continue to be top of mind for all stakeholders to ensure the longevity and ultimate success of the Premier League and its member clubs.”  

Football League clubs increase revenue, but Championship clubs are spending beyond means

The combined revenue for clubs across the English Football League– including the Championship, League One and League Two - was more than £1bn in the 2021/22 season. 

Championship clubs recorded a total revenue of £676m, an increase of £76m (13%) since the 2020/21 season. This was predominantly a result of a changing club mix, with the six clubs joining the division from the Premier League and League One having an average revenue of £41m in 2021/22, replacing clubs with an average revenue of £27m. 

The wage costs of Championship clubs fell for a second-consecutive year (£730m). However, despite the decrease, wages remained higher than the revenue earned by clubs in the division for the fifth-consecutive year, with a wage/revenue ratio of 108%.

Championship clubs’ net debt in 2021/22 was £1.7bn, a decline of c.£110m.

Clubs in both League One and League Two reported an increase in revenue in 2021/22. League One clubs’ combined revenues increased 71% to £220m, with the average club generating £9m in revenue. Meanwhile, League Two clubs’ revenue reported an increased 32% to £124m, with an average revenue of £5m per club.

Bridge continued: “The net debt of Championship clubs remains significant, with a vast number of clubs increasing their loans over the 2021/22 season. The glamour of Premier League promotion is spearheading the continual drive for investment in Championship clubs, often in an unsustainable manner, driving some clubs to overstretch financially. It is critical that long-term decisions are now made by clubs’ owners, and with the introduction of the Independent Regulator, focus will turn to improving the distribution mechanism of revenues between the leagues and clubs. This must be accompanied by appropriate governance and financial controls to ensure that any proposed solution is suitable and sustainable.”

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Exchange rate

The average exchange rate for the year ending 30 June 2022 has been used to convert figures between euros and pounds sterling (£1 = €1.18)

Wage costs

Wage costs cover all employees (including players, technical and administrative employees) and include wages, salaries, signing-on fees, bonuses, termination payments, social security contributions and other employee benefit expenses.

About the Sports Business Group at Deloitte

Over the last 30 years Deloitte has developed a unique focus on the business of sport. Our specialist Sports Business Group offers a multi-disciplined expert service with dedicated people and skills capable of adding significant value to the business of sport. Whether it is transactions advice, benchmarking or strategic business reviews, operational turnarounds, revenue enhancement strategies or stadium/venue development plans, business planning, market and demand analysis, acquisitions, due diligence, expert witness, audits, or tax planning; we have worked with more clubs, leagues, governing bodies, stadia developers, event organisers, commercial partners, financiers, and investors than any other adviser.

For further information on our services, you can access our website at www.deloitte.co.uk/sportsbusinessgroup