Benfica: Competing without the wealth of nations

WHEN Benfica hosted Glasgow Rangers in Lisbon on matchday three of the Europa League, it sounded like a game carved out of a distant, glorious past, twice-winners of the old European Cup against one of Britain’s greatest footballing names. If they had met in the 1960s or 1970s, it would have been one of the games of the week. 

It was still a big fixture, but the global pandemic took away all the gloss as the lack of a big crowd removed the passion that would undoubtedly have been generated by a packed Estádio da Luz in Lisbon.

In some ways, Benfica – and indeed their stable mates Porto – provide inspiration for clubs outside the elite bracket of household names that form the leviathans of European football. It’s hard for Benfica to compete against the Real Madrids, Barcelonas and Liverpools of this world, in terms of financial clout and commercial appeal. Going head-to-head with these clubs is a daunting task and with each passing season, the strength of the Barca-Real-Bayern axis appears to solidify. But regardless of the imbalanced structure of the European football industry, Benfica’s name still has enormous currency. 

Benfica’s salvation is their uncanny ability to develop young talent that can yield a profit for the club and also underpin the first team. There’s scarcely a major club across Europe that has not signed a Benfica (or Porto) player and the conveyor belt shows no sign of seizing up. Manchester City, for example, recently signed Ruben Dias for € 68 million from Benfica. 

Benfica’s academy, which receives cash investment every year, has allowed the club to remain relatively competitive over the past decade. They realised that income alone from the trinity of matchday, TV and commercial activity was not enough, so they targeted player trading as a way to supplement their revenue streams and to build a reputation as a club that would nurture young talent. 

Without that track record, would Benfica have been able to sell a relatively untried young forward, João Félix for well over € 100 million to Atlético Madrid in 2019? The next young player to be sold for big money could be 21 year-old Darwin Nunez, at € 24 million, the club’s record signing.

Benfica are not the only football institution to create a model that positions them as a “seller”, a tag that clubs like Lyon, Lille, Ajax, Hoffenheim, Eintracht Frankfurt and Southampton really do not like. The reality is that without player trading, these clubs would struggle financially.

Benfica are absent from this season’s UEFA Champions League group as they were beaten in the third qualifying round by PAOK of Greece. That game, in itself, indicates how difficult it is for Portuguese clubs to make substantial progress. That said, Benfica’s record in the UCL is solid – they have been in the group stage for 10 consecutive seasons. Porto deprived them of the place in the group phase this season after their fierce rivals won the Portuguese league and cup double in 2019-20.

Their absence in the competition in 2020-21 will surely impact their finances, although their 2019-20 figures show they have not been as badly affected as some major European clubs. Profit-wise, Benfica’s overall net profit was up by 48.7% to € 41.7 million and revenues rose by 20.5% to € 294 million. For the football arm alone, Benfica’s revenues totalled € 140 million, which was only marginally down on 2018-19’s € 145. 

Benfica’s wage bill still consumed 70% of income, a high figure that will need to be addressed. More positively, net debt appears to have come down below € 100 million.

As Portugal’s best supported club – they averaged over 53,000 per game in 2018-29 – the lack of matchday income in the second half of 2019-20 and into 2020-21 is clearly felt quite badly. The 2019-20 season saw this revenue stream drop slightly, but much will hang on how long the pandemic continues. The club’s manager, Jorge Jesus, wanted Portuguese authorities to allow 20,000 people into the stadium for the Europa League clash with Rangers but the request was denied. They drew 3-3 after being reduced to 10 men.

This season, the club has started reasonably well, winning five of their first six games in the Primeira Liga and still unbeaten after three Europa League matches. Equally relevant, Benfica generated € 73.5 million in transfer sales while spending € 95 million on new players, including Nunez from Almeria and Gremio’s Everton (€ 20 million).

Benfica’s position in football’s hierarchy has certainly declined since their heyday, but they are one of Europe’s best supported clubs and often carry the hopes of the nation on their shoulders. They have also launched the careers of a number of young players and established a reputation as one of the world’s great soccer nurseries. Like it or not, their place in the modern game is an important one.

@GameofthePeople