Combined revenues of top 20 Deloitte Football Money League clubs exceed 4.4 billion euros, defy European economic woes
Source: Deloitte , Author: Posted by BI-ME staff
Posted: Fri February 10, 2012 1:18 pm

INTERNATIONAL. The combined revenues of the world’s 20 highest earning football clubs have defied European economic woes by growing 3% on the previous year, according to the latest Football Money League from Deloitte, the business advisory firm. 

They have achieved double the rate of growth of the economies of the countries represented in the Money League, which grew on average by just 1.7% during the course of 2010 and by 1.3% in 2011.* The 20 clubs generated €4.4 billion in revenue, during the 2010/11 season and now represent over a quarter of the total revenues of the European football market. Nine of the top 20 clubs recorded double-digit growth in the year.

Dan Jones, Partner in the Sports Business Group at Deloitte, commented: “Continued growth of the top 20 clubs during 2010/11 emphasises the strength of football’s top clubs, especially in these tough economic times. Whilst revenue growth has slowed from 8% in 2009/10 to 3% in 2010/11, their large and loyal supporter bases, ability to drive strong broadcast audiences and continuing attraction to corporate partners has made them relatively resilient to the economic downturn.”

For the fourth successive year, the clubs comprising the top six places in the Money League – Real Madrid, Barcelona, Manchester United, Bayern Munich, Arsenal and Chelsea – have remained the same, with no movement in their respective positions for the last three years. 

Real Madrid is now just one year short of equalling Manchester United’s dominance in the top position during the first eight years of the Money League.  They are being chased hard by rivals Barcelona, whose 13% growth in 2010/11 meant revenue surpassed €450m for the first time.  Manchester United’s failure to qualify for the knockout stages of the Champions League in 2011/12 will likely result in the gulf between the club and its Spanish opponents stretching to over €100m.

Jones commented: “Barca’s shirt deal with the Qatar Foundation, will further boost the club’s revenue in 2011/12.  Nonetheless, Real Madrid will be confident it can remain at the top of the Money League next year. The two clubs’ on-pitch performance, particularly in this season’s Champions League, will have a big influence on the final outcome.”

Once again, the Money League top 20 comprises clubs from the ‘big five’ European leagues, six of which come from the English Premier League.  A further five Premier League clubs were just outside the top 20 for revenues in the 2010/11 season (Aston Villa, Newcastle United, Everton, West Ham United and Sunderland).

After its first season without Champions League football since 2003/04, Liverpool slipped another place down the Money League, dropping to ninth position.  Despite reporting strong growth from its commercial revenues, and a new six-year kit deal with Warrior Sports from 2012/13, Liverpool needs a return to European football to help secure its top 10 position in the Money League.  This is under threat from English Premier League rivals Tottenham Hotspur (11th) and Manchester City (12th), among others.

Alan Switzer, a director in the Sports Business Group at Deloitte, said: “Spurs’ recently received planning consent for a new stadium development, coupled with a continuation of their recent on-pitch form, could secure a Money League top 10 position for the club on a frequent basis.  A glance across North London to Arsenal leaves little doubt of the scale and impact of the increased matchday revenue opportunities that arise from a modern stadium development.”

Tottenham’s debut in the Champions League, where it reached the quarter-final stages, gave the club a chance to gain 10th spot in this year’s Money League.  However, it was leapfrogged by Schalke 04 – this year’s biggest climbers – which jumped six places, pushing Italian giants Juventus out of the top 10 in the process.

Schalke’s dramatic rise up the Money League came as a result of a Champions League campaign that saw the club reach the semi-finals of the competition.  However, a disappointing 14th place finish in the 2010/11 Bundesliga season and failure to qualify for Champions League football in 2011/12 will likely see a drop back down next year.

Despite impressive revenue growth, Manchester City slipped one place in the Money League. 

Switzer explained: “The club’s heavy squad investment secured Champions League football for 2011/12.  When combined with the ground breaking 10-year partnership with Etihad, this will provide substantial growth across all three revenue sources and will see City break into the top 10 in the Money League next year.”

Commenting on the impact of UEFA’s financial fair play break-even requirement, Paul Rawnsley, a Director in the Sports Business Group at Deloitte commented: “The focus on football’s future financial sustainability is more prevalent in Europe than at any time in the past 20 years.  We remain keen to see that translated into a better balance between revenue and expenditure.  UEFA’s break-even requirement, to be assessed for the first time in 2013, is helpful in driving this improvement.  It is encouraging more owners to consider the longer term development of their clubs, in terms of generating revenues, investing in facilities and youth development, and controlling their expenditures.” 

* Source: IMF, http://www.imf.org/external/pubs/ft/weo/2012/update/01/index.htm

To review the full findings of the Deloitte Football Money League, please visit: www.deloitte.co.uk/sportsbusinessgroup.

The Deloitte Football Money League – 2010/11 revenue

 

Source: Deloitte Football Money League 2012

Note: This article is based on the Deloitte Football Money League published in February 2012.  As explained more fully in the publication, the revenue figures are extracted from the annual financial statements of the company or group in respect of each club, or other direct sources, for the 2010/11 season.

The three clubs that have dropped out of the Money League for 2010/11 (compared to the top 20 clubs based on 2009/10 revenue) are Atlético de Madrid, VfB Stuttgart and Aston Villa.

There are many ways of examining the relative size, wealth or value of football clubs.  For the Money League, revenue has been used as the most easily available and comparable measure of financial performance. 

Revenue excludes player transfer fees, value added tax and other sales related taxes.  In a few cases we have made adjustments to total revenue figures to enable, in our view, a more meaningful comparison of the football business on a club by club basis.  For instance, where information was available to us, significant non-football activities or capital transactions have been excluded from revenue. 

Some revenue differences between clubs, or over time, may arise due to different commercial arrangements and how the transactions are recorded in the financial statements; and/or due to different ways in which accounting practice is applied such that the same type of transaction might be recorded in different ways.

For the purpose of the international comparisons, all figures for the 2010/11 season have been translated at 30 June 2011 exchange rates (£1 = €1.1073).  Comparative figures have been extracted from previous editions of the Money League.

Later this year the Deloitte Annual Review of Football Finance will be published, providing a more detailed analysis of the English and European football finance landscape.

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.

For further information, please visit www.deloitte.co.uk/sportsbusinessgroup

About Deloitte:
Deloitte refers to one or more of Deloitte Touche Tohmatsu Limited, a UK private company limited by guarantee, and its network of member firms, each of which is a legally separate and independent entity.

Deloitte provides audit, tax, consulting, and financial advisory services to public and private clients spanning multiple industries. With a globally connected network of member firms in more than 150 countries, Deloitte brings world-class capabilities and high-quality service to clients, delivering the insights they need to address their most complex business challenges. Deloitte's approximately 182,000 professionals are committed to becoming the standard of excellence.

For more information, please visit please www.deloitte.com/about

About Deloitte & Touche (M.E.):
Deloitte & Touche (M.E.) is a member firm of Deloitte Touche Tohmatsu Limited (DTTL) and is the first Arab professional services firm established in the Middle East region with uninterrupted presence for over 85 years.

Deloitte is among the region’s leading professional services firms, providing audit, tax, consulting, and financial advisory services through 26 offices in 15 countries with over 2,500 partners, directors and staff. It is a Tier 1 Tax advisor in the GCC region (International Tax Review World Tax 2010, 2011 and 2012 Rankings) and was recognized as the 2010 Best Consulting Firm of the Year in the Complinet GCC Compliance Awards.

In 2011, the firm received the Middle East Training & Development Excellence Award by the Institute of Chartered Accountants in England and Wales (ICAEW).

 

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