Germany’s Bundesliga braces itself after bull run comes to an end

GERMANY’s Bundesliga is the envy of the world in many ways: affordable ticket prices, high levels of stakeholder engagement, big crowds and successful teams. Furthermore, the Bundesliga and Bundesliga 2 contribute around € 1.4 billion in taxes and duties to the German economy and employ 53,000 people. 

But like all major leagues, the Bundesliga felt the pinch in 2019-20 from the pandemic and they are facing the future aware that the financial consequences of covid-19 has only just started. “This is just the beginning,” said DFL executive committee speaker, Christian Seifert. “No one was prepared for the extent to which the crisis would affect all areas of life, and football is no exception…we know that the pandemic will continue to have a significant impact on society as a whole in 2021.”

In 2019-20, Bundesliga revenues declined by 5.4% to € 3.8 billion and the combined total of Bundesliga and Bundesliga 2 was down by 5.7% to € 4.5 billion, the first time in 15 years that income had dropped. There were, of course, good reasons for that, but the likelihood is that 2020-21 will be even worse for all clubs given they may spend the entire campaign playing behind closed doors.

Of the 18 top flight clubs, 13 generated total revenues north of € 100 million, but only eight achieved a positive result, compared to 14 in 2018-19 and 13 in 2017-18. Bundesliga 2 had seven clubs in positive territory, half as many as 2018-19. 

The lack of spectators in the closing weeks of the season had a negative effect on the league’s finances. Matchday income in the Bundesliga fell by 21% to € 363.5 million and contributed 9.6% to the overall pot. In 2017-18 and 2018-19, matchday contributed 14% and 13% respectively with a recent annual average of € 536 million.

Media income managed to remain strong, partly attributable to successful negotiations by the league, and rose slightly to € 1.5 billion, contributing 39.2% to overall revenues. Advertising also increased marginally to € 889 million.  

The figures relating to Bundesliga 2 underline the huge gap between the two divisions. The Bundesliga earns around five times more than its poorer relation. However, among Europe’s second level competitions, Bundesliga 2 can attract an average gate of close to 20,000 in a normal season. Only England’s Championship has better attendances among second divisions.

For the first time in seven years, transfer activity declined in the Bundesliga, although buying and selling players still accounted for almost € 600 million of income. According to Transfermarkt, in 2019-20 Bundesliga clubs spent € 848 million, with the biggest spenders Borussia Dortmund (€ 134 million), Bayern Munich (€ 126 million) and Hertha Berlin (€ 100 million). The latter two clubs had the highest net outlay, both nursing a negative balance of more than € 75 million.

Despite lower revenues, player wages rose slightly in the Bundesliga, although administrative staff experienced a cut in salary. Given the downturn, it was no surprise that the overall wage-to-income ratio jumped to 44.8% which compared to many European leagues is still relatively low even though it was 2.5 percentage points higher than 2018-19.

The total assets of the Bundesliga for 2019-20 were € 3.95 billion (2019 € 3.8bn), with player values € 1.47 billion (€ 1.2 bn). The league’s equity ratio was 43%, lower than 2018-19 but the second highest in Bundesliga history. 

German clubs continued to fare well in European competition. Bayern Munich won the UEFA Champions League in 2019-20 and only Bayer Leverkusen failed to qualify for the knockout phase of the competition, moving over to the Europa where they reached the last eight. RB Leipzig fell at the Champions League semi-final stage, losing to Paris Saint-Germain. Bayern Munich and Borussia Dortmund are still involved in the Champions League in 2020-21, but all the German clubs have been eliminated from the Europa League. 

German football remains in good shape but there will be challenges in the near future. Seifert concluded in the league’s economic review: “Over the past 20 years, German professional football has established economic foundations on which the two leagues are able to build their future. At the same time, however, it is clear that the massive ramifications of the pandemic will require all of the clubs to continue to act with absolute financial discipline and considerable foresight.” 

Although Seifert’s caution is understandable, few would doubt that Germany’s football organisation is better equipped than most to withstand shocks to the system.

@GameofthePeople

Photo: PA

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

This site uses Akismet to reduce spam. Learn how your comment data is processed.