Football’s decade of capitalism

THE Deloitte Football Money League always makes interesting reading, but its annual appearance reminds us what big-time football has become – a major global industry. The past 10 years has created footballing behemoths, but never has the gulf between the elite and the also-rans been so great.

It would be wrong to say football has never been about the rich and poor. The composition of the rich list certainly has changed – in the 1980s, the “big five” in England comprised Everton and Liverpool, Manchester United, Tottenham and Arsenal. In the period between the late 1960s and early 70s, if you compiled a “big six”, it would probably have consisted of: Leeds United, Liverpool, Everton, Chelsea, Manchester United and Tottenham. Today, Everton are struggling to keep pace and Leeds have a lot of work to do to claim a place among the elite. But essentially, the clubs with heritage wealth have remained at the forefront of their domestic leagues, even if some, such as AC Milan and Inter in Italy, have fallen away from their lofty peaks.

The past decade, nevertheless, has seen the rise of clubs like Manchester City and Paris Saint-Germain, in pretty much the same way as Chelsea rose to the top. All three clubs have one thing in common – inflated investment.

A Manchester City fan takes a photo before the Premier League match against Chelsea at the Etihad Stadium, Manchester


Inflated is the best way to describe what has happened. Broadcasting fees have rocketed as TV realised the potential of big-time football. The revenue streams of the top clubs have grown enormously and at the same time, the value of the clubs has risen. They are no longer rich-man’s playthings, they have started to appeal to business people who are not just pouring cash in and asking no questions. This doesn’t necessarily make the investors popular as fans expect owners to provide the financing for their passion. As more US investors come into the game, they expect to get something back for their input.

This is what differentiates the investors in Chelsea, PSG and Manchester City from those who have bought into Arsenal, Liverpool and Manchester United, to name but three. But even with the big cash investments in these clubs, Barcelona and Real Madrid, who have no huge investor but have built franchises that have been based on critical mass, social importance and self-perpetuating success, are still the clubs at the top of the pile. In Deloitte’s Football Money League 2020, Barcelona have claimed top place for the first time, boosted by revenues of € 841 million. Real Madrid are in second position with revenues of € 757 million and Manchester United are third ( € 712 million).

The Deloitte report has been a benchmark for many market experts, although it is based on revenues and no other criteria. But it can also tell us a lot about the growth of the industry.
Comparing 2010 to 2019 reveals the clubs that have made dramatic progress over the 10-year period. PSG have seen revenues grow by an astonishing 663% in that timeframe, a true example of how money can elevate a club to unprecedented highs. When you consider that Olympique Lyonnais experienced a 51% rise since 2010, the sheer scale of PSG’s advantage in France is highlighted.

Unsurprisingly, Manchester City’s resurgence has seen their revenues increase by 300%, from € 153 million to € 611 million. Their cross-town rivals, Manchester United, despite spending most of the decade trying to adjust to the post-Ferguson world, rose by 103%. Admittedly, City were coming from a lower starting point, but City’s momentum, coupled with United’s lack lustre performance, has closed a gap that was once huge.

The same cannot be said of lower division football in England. Three clubs, randomly selected for this article, Crewe Alexandra, Preston North End and Walsall, in the period from 2010 to 2018, increased their income by 13%, 18% and 9% respectively. Compare that to the top Premier clubs (Man.United +103%, Man.City +300% and Liverpool +168%) and the imbalance in English football is very apparent.

Manchester United manager Ole Gunnar Solskjaer (left) and Manchester City manager Pep Guardiola look on.


In London, there has been a big shift among the top three clubs. In 2010, Arsenal had the highest revenue, their total of € 274 million some 47% greater than Tottenham’s income and 7% more than Chelsea’s revenues. By 2019, Tottenham, who had seen income grow by 256%, had revenues of € 521 million versus Chelsea’s € 513 million and Arsenal’s € 446 million. Arsenal’s revenue growth over the 10 years, 62%, was one of the lowest among the top clubs.

Arsenal’s decline on the pitch, compared to the early years of the Wenger era, eventually eroded some of their financial strength, underlining the value of Champions League football on a regular basis. The club, in 2010, was a shade frustrated by the emergence of monied rivals, notably Chelsea, but by the end of 2019, it was an unhappy club with angst about Tottenham, club’s owner and the continued lack of success. Liverpool bucked the trend of US ownership dissatisfaction by emerging as a force to be compared with the club’s glory days of the 1970s and 1980s. As well as posting record profits, Liverpool’s revenues, topping € 600 million in 2018-19, were 168% higher than 2010.

In both Germany and Italy, the clubs with financial power dominated, with Bayern Munich and Juventus increasing income by 111% and 124% respectively. The decade also saw the fall of the Milan duo, AC Milan and Inter. AC Milan, in 2010, were seventh in Deloitte’s league table with revenues of £ 235 million, but they ended 2018-19 in 21st position with revenues actually lower – € 206 million. Inter have, seemingly, recovered some of their poise as a club and their revenues grew over the period by 62%, but they are a long way off their historical highs.

The decade has also seen the ascent of Atlético Madrid, who have moved closer to Spain’s big two. In 2010, Real Madrid’s revenues were 3.5 times the amount earned by Atléti and Real generated 10% more than Barca. In 2019, 3.5 had become x 2 and Barca had overtaken Real (€ 841 million versus € 757 million).

While some of these figures are jaw-dropping, emphasising the rise of football as a cash-rich industry, even the biggest clubs are relatively small by corporate standards. While clubs are using financial instruments from the capital markets such as risk management tools and hedging, as one leading writer pointed out, the top football club’s turnover is no more than a medium sized local supermarket in a suburban town.


Over the 10 years, banks and other financial institutions have shown greater interest in football, notably boutiques rather than the large commercial banks. Banks have certainly been a key sponsor for some leagues and clubs, but other more speculative institutions, such as private equity firms and hedge funds have also entered the market. The financial sector is not philanthropic when it comes to football, so it is safe to assume that they all see an opportunity.

Banks may also see possibilities in snaring very high net worth owners who may need capital market, corporate finance or asset management services. Footballers themselves are also attractive clients for financial services firms.

Gambling companies have also been opportunistic over the past few years. Only recently have people expressed concerns about the number of companies from the sector with their names on club shirts. Today there are nine Premier League clubs with betting company shirt sponsors.

Clubs have become wealthy on the back of dramatically rising broadcasting fees, greater commercial prowess and spectator demand for tickets. In 2010, the English Premier League’s average attendance was 34,151 – by 2019 it had climbed to 38,181 – an increase of 12%. France (+14%), Germany (+2%) and Italy (+1%) also rose, but Spain declined by 5% over the period. In England and Germany stadium utilisation rates are almost at 100%.

Broadcasting revenues may have peaked, although there is greater competition emerging with technology companies, such as Amazon, entering the market. The Premier League, for example, now sells its main rights for £ 5 billion-plus, way ahead of the other main leagues. The revenues the clubs gain from broadcasting have allowed them to become more competitive and have elevated their status, making even medium-sized English clubs “bigger” than European “royalty” like AC Milan and Ajax.

Clubs have also started to securitise broadcasting revenues, receiving financing based on future income from TV. While this is a normal financial market practice, the danger is that football clubs may fall into the same trap that has compromised some corporates in the past, the somewhat speculative practice of revenue anticipation. Should something unexpected happen, such as the bursting of the TV bubble, then the consequences could be dire. The top 10 clubs in Deloitte’s Football Money League generated around 40% of their income from broadcasting, ranging from Tottenham’s 53% to Bayern Munich’s 32%. In some leagues, there is an element of over-reliance.

Changing roles

The 21st century has shown us that football management is an even shorter term job than it was in the past. Clubs demand success and they are impatient. Hence, every manager is temporary – the days of Ferguson and Wenger are long gone – and José Mourinho is not the only manager who doesn’t stick around very long. In an era when sporting directors and recruitment specialists appear to have more control than the managers over who gets signed, the occupants of the technical area are merely custodians and the project of team construction belongs to the broader club.

The transfer market has changed substantially since 2010. FIFA reported in December that of the 17,000 transfers completed, more than 3,500 involved at least one intermediary. The cost of dealing with agents is growing all the time. In 2019, in excess of US$ 650 million was spent on commissions, a rise of just under 20%. Some 80% of that figure was paid by clubs from Italy, England, Germany, Portugal, Spain and France. Transfers were once paid in instalments, but increasingly clubs now seek financing that allows them to receive their money sooner and in one tranche. One of the negative aspects of intermediary involvement in player transfers is the increased incident of an individuals agitating for a move from their current club. Virgil van Dijk’s transfer from Southampton to Liverpool is one such case, but there have been others.

Of course, player wages have also grown exponentially. In 2010, Chelsea’s wage bill was £ 174,111 which represented 82% of turnover, a high figure by anyone’s standards. Chelsea were widely criticised for the size of their budget in 2010. Ten years on, their revenues have gone up and so too has their playing budget, but the wage-to-income ratio is now a more manageable 64%. Arsenal, meanwhile, has seen their ratio increase, from 47% in 2010 to 63.5% in 2019.

Barcelona’s wage bill is the biggest in world football. In 2018-19, it amounted to more than half a billion euros (59% of income). In 2010, their ratio was 68% on turnover of less than       € 400 million. Barcelona are also considered to be the highest payers in world sport, according to Sporting Intelligence’s Sports Salary Survey. In fact, the top three in the survey are all football clubs – Real Madrid and Juventus just behind Barca.

The last 10 years’ has also seen the growth of social media, a force for good and, quite often, a negative influence. Clubs and players use social media to grow their global presence and use a broad range of channels to spread their word. Real Madrid and Barcelona, have more than 200 followers across Facebook, Twitter and Instagram. Increasingly, fans are consuming football by alternative formats and the arrival of OTT coverage will surely increase the options. In recent years, the concept of the “tourist” supporter has resulted in a volley of mobile phones recording the stadium experience, distracting the supporter but giving them a “digital souvenir” of being at the game.

Social media is, of course, used to help drive revenues, and if anything captures the spirit of contemporary football, it is surely the development of football clubs as commercially-driven operations. But clubs have also embraced the idea of corporate social responsibility. It is easy to be cynical about the motives of these initiatives, just as it is not too difficult to be sceptical about the rationale for large corporates sending staff out to the third world to feed or teach children, but it clearly makes them feel better about themselves. Importantly, clubs are also trying to be more inclusive. Most large clubs now have women’s teams and programmes to combat racism, homophobia and anti-semitism. Unfortunately, the football demographic has always provided a convenient theatre for prejudice and political extremism to flourish and over the past few years, we have seen a revival of the old terrace bigot. Social media has played its part, with trolls hiding behind the cloak of anonymity.

On the subject of anonymity, the arrival of Video Assisted Referees appears to have thrown important decisions into the hands of shadowy figures in dark rooms. Given the amount of money in the game, technical expertise solving genuine problems seems only logical. It hasn’t been fine-tuned properly as yet, but as the world becomes more reliant on technology, we can expect football to be constantly reshaped by innovation and the search for excellence. Let’s be honest, there’s enough money to make sure the spectator gets the best possible product. It’s important to make sure the pursuit of money doesn’t get in the way.



Photos: PA

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