Money and power

Success comes at a cost

Photo: James FJ Rooney via Flickr CC BY-NC-ND 2.0

FOOTBALLERS and their wages is a controversial subject, although some players, such as Manchester United’s Juan Mata, demonstrate their more sensitive side. Regardless of Mata’s Common Goal initiative, which encourages players to donate a given percentage of their wages to charity, UEFA President Aleksander Ceferin recently proposed reforms that would include a salary cap.

In any industry, supply and demand are the factors that govern how much money is paid. However, in this age of excess, the supply is governing how much the players should be compensated for their services.

Some might suggest that clubs are over-paying their players, that they are spending more than can afford.          But KPMG Football Benchmark’s latest report on salaries, reveals that from 2011-12, all the big five leagues – EPL, La Liga, Bundesliga, Serie A and Ligue 1 – grew revenues in excess of total staff costs. At the same time, broadcasting fees, now a vital source of income, also grew significantly during this period.

Earlier this year, Forbes revealed the world’s highest paid footballers. Needless to say, Real Madrid’s Cristiano Ronaldo was at the top with total earnings of USD 93m per year. Lionel Messi was second on USD 80m and Neymar was third on USD 37m. These figures include all revenue streams, the highest salary in world football belongs to Carlos Tevez, who earns GBP 32m from his club, Shanghai Shenua of China.

Interestingly, in KPMG’s study, Real Madrid and Barcelona both saw a substantial increase on staff cost versus revenue growth over the past five years. While Barca’s revenues were up by 28% during this period, their salary costs went up by 59%.

Is there any sign that the money is going to dry-up? Not yet, for while clubs are earning huge TV revenues and attendances remain healthy, the big European clubs are well positioned to sustain the current trend. Football Benchmark reveals that there is a common factor among the poorest performers in their study: Real, Barca, Chelsea and Bayern. They are the last four winners of the UEFA Champions League trophy. “Winning comes at a cost and eventual bonuses or contract renewals might have a stronger impact on a club’s books than any success achieved on the international stage.”

To see Football Benchmark’s full report, click here

 

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