Income falls, but the song remains the same in football’s money league

WITH no sign of a resumption of football as a spectator sport, Europe’s top clubs could be € 2 billion out of pocket by the end of the current season. That was the view of Deloitte as they unveiled their latest Football Money League for 2021 this week.

There’s few surprises in terms of the listing, the top 14 remains the top 14 as it has done for three years. The deckchairs are slightly rearranged, Manchester United falling to fourth, Liverpool climbing to fifth, Arsenal still out of the top 10 and Real Madrid and Barcelona slugging it out at the top. There are two new entrants in the 20: Gazprom-backed Zenit St. Petersburg and Eintracht Frankfurt. Zenit, the Russian champions, are the only club in the 20 from outside the “big five” European leagues.

Football clubs across Europe have suffered from a loss of revenue due to the pandemic. The average income for the top 20 totalled € 409 million, some € 55 million lower than in 2018-19. The league with the highest overall fall was the Premier League, € 413 million, while the biggest drop to the average club income was seen in Spain and France € 68 million.

All the top clubs saw their overall revenues decline, Barcelona, the number one club by income (€ 715m) experienced a 15% fall, but the downturn varied at Real Madrid (-6%), Bayern Munich (-4%), Manchester United (-19%), Liverpool (-8%), Manchester City (-11%) and Paris Saint-Germain (-15%). While matchday and broadcasting income fell right across the board, 12 of Deloitte’s top 20 were boosted by increased commercial revenues. Tottenham were the only club in the top 10 to enjoy increased matchday cash. Deloitte suggested that matchday revenue for 2020-21, should the current situation continue, would be close to zero. 

Deloitte’s top 10

Pos 2021 Pos 2020 Club Revenues € m Change %

Domestic Lge pos 2019-20

1 1 Barcelona 715.1 -15 2
2 2 Real Madrid 714.9 -6 1
3 4 Bayern Munich 634.1 -4 1
4 3 Manchester Utd 580.4 -19 3
5 7 Liverpool 558.6 -8 1
6 6 Manchester City 549.2 -11 2
7 5 Paris St-Germain 540.6 -15 1
8 9 Chelsea 411.9 -9 4
9 8 Tottenham 445.7 -15 6
10 10 Juventus 397.9 -13 1

Within the little-changed membership of the league, there are some interesting signs of the changing landscape. For example, the two Manchester clubs have never been closer in terms of their revenues. In 2014-15, United had an advantage of £ 143 million, a figure that was eroded to £ 87 million by 2018. In 2019-20, the differential became just £ 28 million. Similarly, the three-way battle between London rivals Arsenal, Chelsea and Tottenham is changing all the time.  

Five years ago, Arsenal were generating the highest revenues in London, £ 350 million. Tottenham’s total was just £ 209 million at the same stage. In 2018, Arsenal were in Deloitte’s top six, but as their revenues have declined, thanks to the loss of perpetual Champions League football. They have been overtaken by Tottenham and Chelsea and find themselves outside the top 10 for the second successive year. 

Italian clubs have experienced very mixed fortunes, although Juventus maintained their top 10 position. Inter have plateaued at 14 for the third consecutive year, but their San Siro house mates, AC Milan, have sunk to a place outside the 20 at number 30.

With Barcelona embroiled in internal politics and Real still burdened by an ageing squad, both Spanish giants also have infrastructure projects that will hamper their financial progress in the coming year. With that in mind, their place at the head of Deloitte’s interesting snapshot table may be threatened by European champions Bayern Munich. As Deloitte so candidly stated, the full impact of covid-19 may not be realised for some years to come. One thing is fairly certain, though, the clubs in Deloitte’s study should come through the crisis a little challenged but intact, unlike some of their smaller cousins.

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Photo: PA

Polarised Premier League almost a £ 5 billion business

IT IS true what they say: the rich and powerful rise to the top, the also-rans struggle for scraps from the table. The Premier League, in 2017-18, generated record revenues of £ 4.8 billion, an increase of 6% over the 2016-17 season. While this hints at a healthy, affluent league, it should be noted that the gap between the top six clubs and the rest is very significant, a gulf that is also mirrored in the points generated by the elite clubs in 2028-19.

The top six clubs by revenue will surprise nobody, but what is alarming is the difference between the sixth highest club by income, Tottenham (£ 428 million) and seventh-placed Everton (£ 212 million). Align that with the 2018-19 points tally of Manchester United in sixth position (64 points) and Wolves in seventh (51 points) and it merely confirms the theory that the Premier League, for all its hype, is a series of leagues within leagues.

According to Deloitte, the Premier’s 20 clubs made a combined profit of £ 400 million, slightly down on 2016-17 but the fourth time in five years that a collective pre-tax profit has been made by the league.

However, look more closely and the overall health is probably not quite so rosy, despite the enormous TV fees and prize money. Almost all of the profit was made by the top six clubs, meaning that the majority were not profitable in 2017-18. Liverpool (£ 125 million) and Tottenham (£ 139 million), posted world record profits for football clubs.

Success comes at a cost, though, and Premier League wages were up by 15% to £ 2.9 billion. Media reports suggest that Manchester United’s wage bill is 2017-18 was the highest in the Premier at £ 296 million with Liverpool next at £ 263 million. Tottenham’s is said to be £ 160 million, more than £ 60 million lower than north London rivals Arsenal.

Interestingly, with Liverpool, Tottenham, Arsenal and Chelsea all enjoying long European campaigns, the 2018-19 season should see their UEFA revenues climb considerably. Tottenham will also surely move up a gear with the opening of their spectacular new stadium.

The increase in players’ wages impacted clubs’ operating result, with a small decrease to under £ 900 million. The wage-to-revenue ratio increased to 59%, up from 55% (a 19-year low due to the boost from year one of a broadcasting cycle). While 59% is the aggregate figure, almost half of Premier clubs recorded a wage-to-revenue ratio of 70% or more.

The wage increase was not totally unexpected as the 2017-18 season saw two record transfer windows with Premier spending almost touching £ 2 billion. This may be a short-term phenomenum, however, as broadcasting rights, which account for around 60% of total Premier income, may have plateaued and could only marginally increase in the future. There are already signs in the transfer market, with the current season’s expenditure falling to around £ 1.4 billion. The big question is whether the Premier League has peaked and reached saturation point?

Photo: PA