Manchester City top the Deloitte list

MANCHESTER CITY have broken the strangehold of Barcelona, Real Madrid and Manchester United on the Deloitte Football Money League (DFML) and have topped the 2022 rankings. City jumped five places and were one of three clubs to generate more than € 600 million in revenues.

City’s income went up by 17% while most of their immediate rivals saw their earnings fall as the pandemic really hit home on top level football.  Barcelona, for example, who were top in 2021 and 2020, saw their income drop by 18% to € 582 million. Barca’s recent financial problems are well documented, but covid-19 exposed some significant vulnerabilities in their business model, along with a number of other clubs. With matchday money almost disappearing completely to € 111 million, contributing just 1% of overall revenues across the DFML versus 15% in 2019-20, the importance of broadcasting and commercial streams grew substantially. 

Manchester City’s climb up the DFML saw their revenues grow from £ 12.7 million to £ 571 million in the 25 years the study has been produced. In 2020-21, City benefitted from increased broadcasting (+55%) and commercial (+8%). Their commercial earnings are actually 10 times the total reported by clubs such as Aston Villa and Wolverhampton Wanderers.

City’s total was only just higher than Real Madrid’s € 640.7 million and some € 33 million more than Bayern Munich’s € 611 million. Bayern continued to be the most successful club in terms of commercial income, although their € 345 million was almost 5% down on the previous season. The total commercial stream across the DFML was € 3.5 billion, about 7% less than 2019-20. Seven of the top 20 saw their commercial stream grow, notably Leicester City (+39%) and Aston Villa (+20%). Conversely, Everton’s commercial activity dropped by a very worrying 39% and Manchester United fell by 21%. 

The saving grace for some clubs was broadcasting income. Only one of the top 20 (Zenit), saw this stream fall, and some clubs, such as Aston Villa (+99%), West Ham (+98%) and Manchester United (+80%), enjoyed healthy improvements. Overall, broadcasting money, which totalled € 4.6 billion to the DFML clubs, contributed 56% of the overall pot, as opposed to 39% in 2019-20. 

While football was vocal in its suffering during the height of the pandemic – estimates claim clubs lost € 2 billion during the crisis – the DFML teams saw their revenues remain almost static at € 8.2 billion. However, this figure was more than a billion euros down on the pre-covid 2018-19 season. The losses meant that wages consumed a greater percentage of earnings, for instance, Barcelona (84%), Inter (77%) and Leicester (85%) all had inflated and unsustainable wage-to-income ratios.

The top 20 were very active in the transfer market, spending € 2.1 billion while receiving € 891 million. The biggest spenders were Chelsea (€ 249 million), Manchester City (€ 219 million and Juventus (€ 137 million).

The top 14 of the DFML has evolved over the past five years and there is a clear gap between these elite clubs (six Premier, three La Liga, two Bundesliga, two Serie A and one Ligue 1) and the rest of the top 20, some of whom drop in and out of the list according to their season-by-season performance. The Premier, unsurprisingly, dominates the top 20 to the tune of 55% (11 clubs). There are another three Premier clubs in the 10 “bubbling under” candidates. With the Premier’s TV rights issue likely to pull further away from the other leading European leagues, the prospect of more English clubs challenging for a place in the DML seems probable. Broadcasting fees are poised to reduce in 2021-22 but this will be partially offset by a new cycle for UEFA club competitions.

The DFML highlights the clubs that are rising and falling. Manchester City, obviously, have risen the ranks in the last 10 years, while Paris Saint-Germain have also climbed and plateaued. Atlético Madrid have also joined from outside the DFML and are now perennial 13th placers. Tottenham have also improved to become top 10 mainstays, but their north London neighbours, Arsenal, have fallen from top six to a position outside the top 10. This really mirrors their performances on the field of play. Manchester United have also declined and are now at a 10-year low. AC Milan, once a top 10 player, are now clinging to the last place in the top 30.

Clubs are also showing greater awareness around social issues, inclusion and diversity, but they are still slow to back their words with action. For example, only five of the top 20 have signed the UN Sports for Climate Action Framework. Moreover, very few have ethnic representation on their board, although Leicester City and Manchester City have 75% and 57% respectively. Similarly, only half of the 20 have women directors and overall, there is an 11% presence of women across all boards. Juventus (40%), Tottenham (25%), Leicester (25%) and Everton (25%) lead the way. However, all 20 clubs in the DFML have a women’s football team for the first time in the 25 years of the report, in fact, many of the clubs from the list are dominating the women’s game.

Of course, the Deloitte Football Money League study only provides one snapshot of a club’s financial health and, as widely reported, some clubs have made heavy losses during the pandemic. And then there are external influences, such as at Chelsea where the Ukraine war has been the catalyst to unseat Russian oligarch Roman Abramovich as the club’s owner. The situation at Chelsea could change the way the football authorities look at club ownership in the future. Given the introduction of oil men and nation states transformed football at the highest level and created huge financial imbalances that are certainly not beneficial for the majority of [smaller] clubs, not everyone will see this as a bad thing. Indeed, some might consider that more scrutiny around ownership and independent regulation in football are both long overdue.

Don’t assume European football’s hierarchy cannot change

THE last time a team from outside football’s top 20 clubs won the UEFA Champions League was in 2004, Porto beating Monaco 3-0 and launching the career of a certain José Mourinho. Since then, eight clubs have won the competition and the likelihood is that future winners will come from a select band of wealthy, influential market leaders.

The financial league tables produced by a variety of agencies and consultancies reflect Europe’s elite by clout, playing strength and power, both domestically and internationally. It’s not difficult to select the clubs that might become members of a hypothetical European Super League.

Similarly, the UEFA Champions League is the playground for most of these clubs, although some are in danger of losing that privilege. The last 16s of the UEFA Champions League and UEFA Europa League demonstrate the hierarchy of European football in 2021. Some may only be temporary Europa League contestants, while others are at risk of becoming permanently part of the Thursday Night Club.

For example, clubs like Arsenal, AC Milan and Manchester United have a rich Champions League heritage, but in recent years they have slipped from their pedestal. AC Milan’s resurgence, which could be running out of steam, may see them back in Champions League action in 2021-22, but it seems unlikely Arsenal will qualify unless they win the Europa League in 2020-21.

The last 16 of the Champions League is, as ever, very strong. Eight of the clubs have won the competition before, while another three have been finalists. In total, 14 have won a major European prize, the only clubs without a UEFA victory of some sort are Leipzig and Atalanta.

The Europa League has its usual heady mix of second-tier elite clubs, a couple of wild cards and the very fortunate. There are three European champions in the mix: AC Milan, Ajax and Manchester United, and a further six who have won a European prize, including Arsenal and Spurs, Rangers and Dynamo Kiev. In theory, given the financial power of the Premier League, the Europa should be won by either Arsenal, Manchester United or Tottenham. 

There are six 2019-20 champions in both the Champions League and Europa League. Forty years ago, these 12 would have been playing in the same competition. The expansion of the Champions League may have created arguably the world’s leading football competition, but it is not the most inclusive of formats. While the elite have been guaranteed a place at the table come what may, the smaller fish have been pushed into colder waters. A club like Ajax – four European Cups between 1971 and 1995 – have become a Europa League outfit, although their status as Dutch champions gives them a place in the group stage of the UCL. The last incarnation of Ajax the football factory was relatively short-lived as all their stars gradually departed Amsterdam, some for huge fees. They will be back in due course.

Winning your domestic league used to give a team status, but that’s not the case today. Dinamo Zagreb are a case in point – serial league champions in Croatia, but they have to go through a couple of very greasy preliminary rounds before getting to the group stage. They were beaten by Ferencvaros, another club that was once a tricky European destination, but one that has, to a certain degree, been marginalised in the modern game.

Other clubs have seen their stock fall over the past 30 years, including: Benfica, Sporting Lisbon, Feyenoord, PSV Eindhoven, Celtic, Anderlecht, Roma, Marseille, Legia Warsaw and countless others. There are other clubs that are clinging to their history, such as Inter Milan.

Some flirt with the leading band, but where they were once formidable in European competition (especially on their own ground), they are now often seen as make-weights. With the exception of Benfica, these are, essentially, Europa League clubs, although that doesn’t mean they cannot qualify for the Champions League.

The usual dozen or so of European football as defined by financial strength includes only clubs from the big five leagues. During the past decade, these clubs have provided every Champions League winner and runners-up – 11 clubs in total. Furthermore, over the past 20 years, only four finalists (Porto, Monaco, Leverkusen and Valencia) were not from this group.

Europe’s big guns and their performance 2010-11 to 2019-20

  Average League Position European participation seasonsUCL/UEL Domestic trophies (Excl. LC) European trophies
Real Madrid 2.0 10/0 5 4
Barcelona 1.4 10/0 11 2
Atlético Madrid 3.2 7/4 2 2
Manchester City 2.0 9/2 6 0
Liverpool 4.8 4/4 1 1
Chelsea 3.8 8/2 4 3
Manchester Utd 3.7 7/4 3 1
Arsenal 4.4 7/3 4 0
Tottenham H 4.3 5/6 0 0
Paris Saint-Germain 1.5 8/2 12 0
Bayern Munich 1.3 10/0 13 2
Borussia Dortmund 2.6 8/3 4 0
Juventus 1.6 9/2 13 0
Inter Milan 5.1 4/5 1 0
AC Milan 5.4 4/2 1 0

This list, which is not definitive by any means, would have looked very different 30 years ago. Of the current constitution, Manchester City, PSG, Dortmund and Chelsea would probably have been excluded. Others, such as PSV Eindhoven, Marseille, Everton, Red Star Belgrade and Napoli would surely have been included.

The assumption is that today’s market leaders will remain so and are unlikely to be unseated, but that’s not the case. The unexpected can happen, as we have seen over the past year as human beings became shadowy figures looking through net curtains at the outside world, masks clamped to their faces. 

Black swans can catch a football club by surprise with devastating results. Various sets of events can destabilise a club: Arsenal are still coming to terms with the post-Wenger era; Manchester United struggled to fill the gap left by Ferguson; Liverpool took 30 years to win a league title; AC Milan were rocked by the ending of the Berlusconi period; Glasgow Rangers were sent tumbling down the Scottish football pyramid; and post-Maradona Napoli went close to oblivion. The covid-19 pandemic has not yet revealed its full damage on football, although it is clear that some clubs – Barcelona, if their financial problems worsen, could become a systemic problem for Spain and Europe – have major issues. That’s why we can never presume Europe’s class structure will not change. Just wait and see.