European football market grows again, to exceed $25bn for the first time, with the ‘big five’ leagues surpassing the $12bn mark

8 June, 2014 - The European football market grew in 2012/13, to exceed $25bn in revenue for the first time. It was driven by an increase of almost $1bn across Europe’s big five leagues, whose combined revenues passed $12bn (England, Germany, Spain, Italy and France).

Dan Jones, Partner in the Sports Business group at Deloitte, commented: “This year has again seen the European football market grow, to exceed $25bn for the first time. Looked at in the context of the wider economic climate this is a fantastic growth story, with the size of market growing by over 60% in the last 10 years.”

The largest increase this year was seen in the English Premier League, which grew revenues to total $3.8bn. The Premier League is now, by over $1bn, the world leader in football in revenue terms, with more growth forecast.

Jones commented: “Once again the global appeal of the Premier League continues to drive revenue growth, particularly at the highest ranked clubs. We estimate that Premier League clubs’ revenue will have increased to around $5.5bn in 2013/14, driven by the revenue from the first season of the league’s new broadcast deals and further commercial revenue growth at the biggest clubs.”

Revenue growth was seen across all of the ‘big five’ European leagues. The second highest revenue generating league in Europe, the Bundesliga, saw Bayern Munich and Borussia Dortmund account for over 80% of its increase to $2.6bn. La Liga saw an increase to $2.4bn, primarily driven by new broadcast deals, whilst in Italy, Juventus accounted for over three quarters of Serie A’s revenue growth, with a league total of $2.2bn.

The fastest rate of growth was seen in France’s Ligue 1, driven entirely by Paris Saint-Germain. For the second consecutive season the club accounted for all of the league’s growth. Ligue 1 now has total revenue of $1.7bn.

The Middle East continues to play an important part in the European football story, most notably through commercial partnerships. For example, the increased revenues seen at Abu Dhabi owned Manchester City, along with their rivals Manchester United accounted for over half of the revenue growth seen in the Premier League in 2012/13.

Alexander Thorpe, Consultant in the Sports Business Group, commented: “The ability of European football to remain relatively immune, in aggregate terms, from the wider European economic pressures has been due largely to the global appeal of its leagues and clubs. Attracting broadcast audiences, sponsors and owners from outside Europe has been key, with the Middle East clearly one of the major markets for achieving this. This season has seen the English, French and European Champions all have Middle East based shirt sponsors.”

The ‘big five’ leagues showed relative restraint in terms of wage cost expenditure in 2012/13, with only 25% of the cumulative revenue growth being absorbed by wage cost increases. Four of the five leagues reported static or improving wages/revenue ratios, the exception being the Premier League.

Premier League wage costs continue to mirror its revenue advantage, considerably exceeding those of the other ‘big five’ leagues. Wage costs increased to $2.7bn, outstripping the rate of revenue growth, resulting in a wages/revenue ratio of 71%, its highest ever level.

Other key findings of the Deloitte Annual Review of Football Finance 2014 include:

• Broadcast revenue of $5.9bn represented the largest component (46%) of the collective revenues of the ‘big five’ leagues, and will rise again in next year’s edition given the new Premier League and Bundesliga broadcast deals;
• Commercial revenue of $4.4bn represented 35% of the total revenue for the ‘big five’ leagues, and for the second consecutive year provided the impetus for the leagues’ cumulative growth, having accounted for 64% of the uplift;
• Matchday revenue of $2.4bn (19%) remained broadly flat, as disposable incomes of many European fans came under continued pressure;
• Average league match attendances in 2012/13 fell by 5% in the Bundesliga (to 41,914) with all but three consistent clubs recording a decline in average attendances. La Liga also suffered a reduction in attendances (to 25,464). In contrast, Premier League attendances rose by 4% to 35,903 in 2012/13, a utilisation rate of over 95% and increased again to 39,695 in 2013/14 (a utilisation of almost 96%). Average attendances also rose in Serie A (22,591) and Ligue 1 (19,240), reversing the trend in both leagues over recent years;
• England’s Football League Championship is by far the world’s highest revenue-generating second tier competition, despite total revenue decreasing to $660m in 2012/13.

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