Ajax in unfamiliar territory

AJAX lost their unbeaten record in the Eredivisie last weekend, but they also published their financial statements for 2020-21 season, and like their 1-0 home defeat at the hands of Utrecht, they were a little tough to take.

That said, Ajax’s € 12 million pre-tax loss for the season could have been far worse, especially when compared to some of the huge losses racked-up by Europe’s big clubs.

Ajax’s revenues for 2020-21 totalled £ 125.2 million, a 23% drop on the previous campaign. This was largely attributable to an almost complete loss of matchday income. The total from this stream was just € 1.9 million, a 95% decline compared to 2019-20. The crowds are back this season, the gate against Utrecht was almost 53,000. 

There was also a slight fall in broadcasting revenues, from € 55.7 million to € 55.2 million. By contrast, Ajax’s commercial income was up by 5% to € 68 million, largely due to higher levels of merchandising and boosted by the Dutch governments covid-19 subsidy. Ajax are way ahead of their Eredivisie rivals in terms of commercial acumen, but their earnings are just a fraction of some of the European elite.

Ajax are not accustomed to making an annual loss, indeed in 2019-20 they made a profit of almost € 27 million and two years ago, € 69 million. They’ve only made a loss twice in the past 11 years.

Despite the fall in revenues and the negative bottom line, Ajax’s wages increased by 3% to € 94.7 million, representing 76% of income. In 2019-20, the wage-to-income ratio was 57%.

It is tough for Dutch clubs to compete at the highest level and Ajax are the only club that can look the likes of Real Madrid, Bayern Munich and Manchester City in the eye. But Ajax are a big fish in a relatively small pond, although both PSV Eindhoven and Feyenoord have had their moments in the spotlight. The Eredivisie’s total income is just a fraction of what the leading leagues can generate.

Ajax’s success depends on two key factors: continued involvement in the UEFA Champions League; and player trading. Ajax’s ability to develop young players and sell them into the market is much envied. In recent years, they have sold Hakim Ziyech to Chelsea for € 40 million, Donny Van de Beek to Manchester United (€ 39m), Frenkie De Jong to Barcelona (€ 75m) and Matthijs de Ligt to Juventus (€ 75m). In 2020-21, Ajax made a profit of € 86.1 million from the sale of players, slightly up on a year-on-year basis. 

Champions League football is a prerequisite for the Dutch champions, although it is a challenge to emulate great Ajax sides of the past. Over the past five years, they have made around € 200 million from European competition, which gives them a huge advantage in their domestic market. 

In 2018-19, they were very close to reaching the final for the first time since 1996 with a team that is now largely dispersed. The current team has started its Champions League programme well in 2021-22, beating Sporting Lisbon away 5-1 and Besiktas at home 2-0.  Their big challenge will be against Borussia Dortmund in the group stage, although they should be able to qualify for the knockout phase.

Inevitably, Ajax will lose players at the end of 2021-22, but they may also have to say farewell to their highly-rated coach, Erik Ten Hag, who is seen as a possible replacement for Barcelona’s Ronald Koeman. But Ajax’s cycle will continue turning, as it has done in the past – they are one of Europe’s great football factories.

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