Football continues to show resilience to the extreme challenges faced by many of Europe's economies;
Cost control is still the key challenge, though there are some signs of improvement;
Influence of the Middle East continues to play a role in financial growth across European leagues.
10 June, 2013 – Despite wider economic pressures, the European football market continues to perform well with 11% growth in revenue terms to $24.6 billion in 2011/12, largely driven by Europe's ‘big five' leagues (Bundesliga, La Liga, Ligue 1, Premier League and Serie A) and the impact of UEFA Euro 2012. The ‘big five' leagues account for $11.8 billion (48%) of total revenues, demonstrating the commercial attractiveness of the top clubs and competitions.
Dan Jones, Partner in the Sports Business Group at Deloitte, commented: “Each of the ‘big five' leagues posted record revenue levels in 2011/12, leading to an increase of 8% compared with 2010/11. The total revenue generated by these leagues is likely to surpass $12.5 billion within the next two years, twice the level they generated in 2001/02.”
The Premier League retained its status as world football's highest revenue generating league, with its clubs achieving 4% growth to $3,701m in 2011/12. New three year broadcast deals, starting in 2013/14 and worth over $8.5 billion, will ensure that the Premier League remains the clear market leader in revenue terms for the foreseeable future.
By delivering revenue growth of 7% to reach $2,376m in 2011/12, the Bundesliga extended the gap between itself and third place La Liga to $136m. In local currency, this represented the largest absolute increase of the ‘big five' leagues in 2011/12, with over three quarters of this growth driven by Germany's two largest clubs, Bayern Munich and Borussia Dortmund.
Jones noted: “The Bundesliga looks well set to secure its position as the Premier League's closest rival in revenue terms. Its future growth will be driven by new, more lucrative domestic broadcast contracts due to begin at the start of the 2013/14 season, and an increasing success in expanding into international markets coupled with an all-German 2013 Champions League final.”
Elsewhere in Europe, Spain's La Liga achieved revenue growth of 3% to $2,240m in 2011/12, driven solely by Real Madrid and Barcelona's aggregate increase. Italy's Serie A rate of revenue growth (1%) was the slowest of the ‘big five' leagues in 2011/12, with the league's total revenue reaching $1,992m.
Although it remains the lowest revenue generating ‘big five' league, France's Ligue 1 delivered the fastest rate of growth in local currency, with a 9% increase driving revenues to $1,442m. The growth was entirely driven by Paris Saint-Germain, whose revenue increased by 120% to $282m. By contrast, the remaining 19 Ligue 1 clubs recorded an aggregate fall in revenues.
Alexander Thorpe, Consultant in the Sports Business Group, commented: “With over half of this year's revenue growth across the ‘big five' European leagues attributable to commercial revenue increases, it makes the influence of the Middle East on European football particularly interesting. The continuing tough economic climate in Europe has meant clubs' ability to achieve uplifts in commercial revenue is increasingly dependent on them attracting sponsors from across the globe. Some of the most notable examples of this being with Middle East based organisations. The recent announcement of Emirates' agreement with Real Madrid means that the 2013/14 season will see both of the world's top revenue generating clubs, Barcelona and Real Madrid, carrying Middle Eastern airline sponsors. There are further high profile examples of similar sponsorships across all of the ‘big five' leagues.”
The combined wage costs of the ‘big five' leagues were $7.7 billion in 2011/12. This is 8% higher than 2010/11 and represents a slightly slower growth rate than for their combined revenue. Premier League wages grew by 4% and remain far greater than those of the other ‘big five' leagues, its total of $2,600m being 74% greater than that of its nearest rival, Serie A.
Bundesliga ($1,209m) and La Liga ($1,341m) clubs' wage costs both grew by 3%. Serie A clubs' wage costs rose by 2% ($1,496m). Ligue 1 experienced the fastest rate of growth in local currency, with wage costs increasing by 8% to reach $1,067m. Almost three quarters of the Ligue 1 wage growth was due to Paris Saint-Germain, but the club's revenue growth meant that their wages to revenue ratio fell from 69% to 53%.
Thorpe continued: “Ownership investment from the Middle East into European football now stands at in excess of $1.5bn. We continue to see owners from the region investing significantly in both the playing staff as well as the longer term infrastructure of their clubs. For example, in recent years Paris Saint-Germain and Manchester City have coupled their investment in title-winning playing squads, with a commitment to develop world class stadia and training facilities.”
Other key findings from the Deloitte Annual Review of Football Finance 2013 include:
Broadcast revenue remains comfortably the largest contributor to the total revenue of the ‘big five' leagues, at $5.5 billion. This has been reaffirmed by the agreement of new and significantly improved broadcasting deals in the Bundesliga and the Premier League from 2013/14;
Matchday revenue, which reached $2.4 billion in 2011/12 and accounted for 20% of the ‘big five' leagues' total revenue, continues to suffer most from the economic downturn, having experienced the lowest absolute growth of the three revenue sources;
Commercial revenue was the driving force behind the ‘big five' leagues' revenue growth in 2011/12, its 15% increase represented 58% of the total growth;
Average league match attendances in 2011/12 increased by 5% in the Bundesliga (to 44,293) and marginally in La Liga (to 26,050). Premier League attendances reduced slightly (to 34,646), albeit the stadia remained highly utilised at 93%, and Premier League attendances rebounded to average 35,906 in 2012/13 (95% utilised). Average attendances in Serie A (22,005) and Ligue 1 (18,869) fell for the third and fourth successive seasons respectively;
Outside of the ‘big five' countries, Russia ($807m), Turkey ($563m) and the Netherlands ($551m) have the largest revenue generating leagues in Europe;
England's Football League Championship is by far the world's highest revenue generating second tier competition with total revenue of $746m in 2011/12;
Brazil's Campeonato Brasileiro Série A is the leader for revenue generation outside Europe with its clubs estimated to have generated revenue of around $1,117m in 2012.