Despite significant economic headwinds, the European football market grew by 4%, €0.6 billion in revenue terms, to €16.3 billion in 2009/10, according to Deloitte.
In its latest report, Deloitte said, all of Europe’s ‘big five’ leagues reported revenue growth, to a collective total of €8.4 billion, up 5% from 2008/09. Broadcasting revenue up 7% was the main driver of growth and now stands at over €4 billion across the ‘big five’ leagues.
The English Premier League remained the highest revenue generating league in world football, with its clubs’ revenues increasing to €2.5 billion in 2009/10, up from €2.3 billion in 2008/09. The gap to the second ranked German Bundesliga increased to over €800 million.
The German Bundesliga has the highest average attendances in European football (42,700) which, when combined with an increase in commercial revenues in what is Europe’s largest market, helped consolidate its second placed revenue ranking.
Spain’s La Liga achieved the highest revenue growth of 8%, much of which was driven by increased revenues at both Real Madrid and Barcelona, who between them generate more than half (52%) of the revenue in the most polarised of Europe’s ‘big five’ leagues.
Revenues in Italy’s Serie A increased by €38m (3%) to €1,532million, so Italy remains in fourth position ahead of France’s Ligue 1, whose revenues (€1,072million) grew by the smallest amount (2%) amongst the ‘big five’ leagues.
“The growth in revenues in all of Europe’s ‘big five’ leagues in 2009/10 during the economic downturn is an impressive achievement. The loyalty of fans through thick and thin, and the continued partnerships with broadcasters and sponsors, illustrate that the world’s most popular sport remains as attractive as ever,” Dan Jones, Partner in the Sports Business Group at Deloitte, said.
“Top flight European football is one of television’s most desirable products and, in revenue terms, football continues to be a stellar economic success story in almost all European countries. However, football’s biggest challenge remains the same – the need for greater cost control, notably over players’ wages and transfer fees.”
The ‘big five’ leagues’ wages increased by over €400million (8%) to exceed €5.5 billion in 2009/10. In England, Italy and France wages growth exceeded the absolute level of revenue growth, whilst in Germany revenue and wages grew by similar amounts. In Spain, aggregate wages excluding Barcelona and Real Madrid fell and the overall wages/revenue ratio of 60% represented a ten year low.
The Bundesliga remained Europe’s most profitable league, despite a fall in operating profits from €172million to €138million. England’s Premier League narrowed the gap, with operating profits rising to €101million. Serie A and Ligue 1 remained loss making. In Spain, Barcelona and Real Madrid generated substantial operating profits but the remaining clubs recorded a significant aggregate operating loss.
“Given that the wages/revenue ratio increased again in four of Europe’s ‘big five’ leagues in 2009/10, we welcome UEFA’s intervention on a pan-European basis to help clubs control their costs on a more sustainable basis. The new ‘break-even’ requirement within the UEFA financial fair play regulations will first apply to financial statements ending in 2012, for those clubs which qualify for the 2013/14 UEFA competitions,” Alex Byars, Senior Consultant in the Sports Business Group at Deloitte said.
“The UEFA financial fair play concept was approved in September 2009 and the resultant regulations published in May 2010, so clubs should already be well advanced in making any necessary adjustments to their 2011/12 business plans to ensure compliance with the new rules. In particular, clubs must focus on ensuring a stronger alignment between costs and revenues, building in sufficient flexibility to deal with any revenue shocks. There will be keen interest in the expanded detail from UEFA to enable robust and consistent implementation of the break-even requirement across the continent,” Byars added.
Outside of the ‘big five’ countries, The Netherlands (€420million), Turkey (€378million) and Russia (€368million) have the largest revenue generating leagues – although the English Football League Championship was actually Europe’s sixth largest league in revenue terms in 2009/10, at €497million.