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Annual Review of Football Finance

June 2015

New European broadcast deals drove cumulative revenues of ‘big five’ European leagues up 15% to €11.3 billion in 2013/14

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The European football market surpassed €20 billion in 2013/14, driven by growth in the ‘big five’ European leagues (Bundesliga, La Liga, Ligue 1, Premier League and Serie A) with England’s top twenty clubs now accounting for almost 20% of the European football market.

Dan Jones, Partner in the Sports Business Group at Deloitte, commented: “Each of the ‘big five’ leagues posted record revenue levels for the third successive year in 2013/14, re-emphasising that the best live football remains ‘premium content’ for broadcasters and that commercial partners will pay handsomely to be associated with Europe’s leading clubs given their global profile.”

A 29% (£735m) revenue increase in 2013/14 saw the Premier League further extend its lead as the highest revenue generating league in the world, with total revenue of £3.3 billion (€3.9 billion). Broadcast revenue rose by 48% (£569m) with the new domestic and international rights deals contributing over three quarters of the league’s growth.

Jones added: “In 2013/14 even the Premier League club receiving the least from domestic league broadcast distributions earned more from this source than all but five other European clubs. Following recent announcements of commercial deals for a host of the largest clubs, we expect the Premier League to surpass the Bundesliga in commercial revenue terms and hence lead the world in all three key revenue categories from 2014/15.”

An eighth consecutive year of revenue growth saw the Bundesliga consolidate its position as the second highest revenue generating league in Europe, with total revenue rising 13% (€257m) to €2.3 billion. The new set of domestic broadcast rights contracts for the Bundesliga 1 and Bundesliga 2 were collectively worth over 50% more than the value of the previous rights deals, yet the value of the Bundesliga 1’s rights remain the lowest across the ‘big five’ leagues.

La Liga clubs collectively grew revenue by 3% (€65m) to €1.9 billion in 2013/14, but all of this growth was attributable to the two Madrid clubs, with the other 18 clubs’ aggregate revenues down on the prior year.

Domestically, the individual selling regime continued to distort the financial landscape within La Liga. In May 2015 the Spanish Ministry of Sport announced by Royal Decree that from 2016/17, the rights to domestic Spanish football will be sold on a collective basis, with the hope that this move will create a more attractive and cleaner product for potential broadcast partners.

A marginal €22m (1%) increase in total revenue for Serie A clubs to €1.7 billion in 2013/14 masked significant movements in the financial performance of Italy’s most illustrious clubs, which were all greatly impacted by the extent of their participation in European competition. This was further evidence of the reliance on broadcast revenue inherent in Italian football, which at 59% of cumulative revenues was the highest contribution by a single revenue stream across the ‘big five’ leagues.

Total revenue for Ligue 1 grew by €201m (15%) to almost €1.5 billion in 2013/14, led by Paris Saint-Germain’s revenue growth of €75m. Average attendances in Ligue 1 rose to their highest level since 2008/09, taking average crowds at league matches above 21,000, driven by stadium redevelopments at a number of clubs in the run up to UEFA Euro 2016. Despite this, matchday revenue grew only €5m (4%) to €144m, of which PSG represented 44%.

For the first time since 2006/07, each of the ‘big five’ leagues reported a wages/revenue ratio at or below 70% and on average, less than one-third of revenue increases in 2013/14 went towards wages. With the exception of La Liga, the other ‘big five’ leagues had improving wages/revenue ratios in 2013/14 (Bundesliga 49%, Premier League 58%, Ligue 1 64%, Serie A 70%) with La Liga’s worsening to 60% from 57%. The overall wages/revenue ratio fell to 59%, its lowest level since 1999/00.

Adam Bull, Senior Consultant in the Sports Business Group at Deloitte, commented: “UEFA’s Financial Fair Play Regulations, together with cost control measures in certain domestic leagues, appear to be having an influence on the way in which clubs choose to spend increases in revenue, with less flowing straight through to wage costs. In the past two seasons only 31% of revenue growth across Europe’s ‘big five’ leagues has been spent on wages, in the two years preceding that it was 61%”

The Premier League’s operating profit of £614m in 2013/14 was almost treble the previous record set by the Bundesliga in 2012/13, with 19 of the 20 clubs reporting an operating profit and the overall Premier League’s operating margin increasing to 19%. Once again the Bundesliga was the only other ‘big five’ league to report an operating profit, although this fell by 5% (€14m) to €250m.

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Key findings

  • As a result of the new broadcast rights deals for the two largest European leagues, broadcast revenue grew by 18% to €5.4 billion, contributing 48% of the total revenues of the ‘big five’ leagues. With each of these leagues having announced details of improved broadcast rights deals through to at least 2016/17, the importance of this revenue stream looks set to continue.
  • Revenue from sponsorship and other commercial sources increased by 18% to reach €4 billion, the second largest element of aggregate revenues at 35%.
  • Matchday revenue rose by 4% in 2013/14 and generated €1.9 billion across the ‘big five’ leagues.
  • La Liga’s move towards the collective sale of broadcast rights from 2016/17 will ensure a more equal distribution of broadcast revenues between clubs, bringing the ratio between the highest and lowest earning La Liga clubs, 7.4:1 in the 2013/14 season, to at most 4.5:1. For comparison, in 2013/14 the ratio for Serie A was 5.3:1, Ligue 1: 3.4:1, Bundesliga 2:1 and 1.6:1 for the Premier League.
  • A slight increase in attendances saw the Bundesliga record the highest average level of any European league, at more than 42,600 people per game and a stadium utilisation of over 90%. However, this was not as high as the Premier League’s utilisation of 96%, on the back of a domestic record level average attendance of 36,691 per game. Ligue 1 average attendances increased for the second consecutive year to over 21,000 in 2013/14, whilst in Serie A they rose marginally to 23,011, and remained static in La Liga at 25,320.
  • The gap between the ‘big five’ leagues and other leading European leagues continued to widen in 2013/14. A number of leagues have entered into longer term arrangements with broadcast partners, notably in the Netherlands, Belgium and Denmark, to support the development of competitions and to provide more financial certainty to clubs.
  • Total revenues of €587m in 2013/14 once again saw England’s Football League Championship retain its position as the world’s highest revenue-generating second tier competition.

About the Sports Business Group at Deloitte

Over the last 20 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 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.

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