European football market grows again to almost $29bn in 2013/14, with ‘big five’ leagues surpassing the $15bn mark
-England’s Premier League breaks the $5bn mark for revenue and posts operating profits of $1bn. -Stakeholders from the Middle East continue to play a key part in the story of growth
The European football market grew to total $28.9 billion in 2013/14. Revenue growth across all of the ‘big five’ European leagues (Bundesliga, La Liga, Ligue 1, Premier League and Serie A), saw the combined revenues of the ‘big five’ leagues pass the $15 billion mark ($15.3bn), according to the 24th Annual Review of Football Finance from the Sports Business Group at Deloitte.
Dan Jones, Partner in the Sports Business Group at Deloitte, commented: “Each of the ‘big five’ leagues posted record revenue levels for the third successive year in 2013/14, re-emphasizing that the best live football remains ‘premium content’ for broadcasters and that commercial partners will pay handsomely to be associated with Europe’s leading clubs given their global profile.”
Within the story of revenue growth across European football, stakeholders from the Middle East continued to play an important role in 2013/14, both from an ownership and sponsorship perspective. Alexander Thorpe, Senior Consultant in the Sports Business Group at Deloitte, commented: “A review of the financial landscape of European football is now impossible without observing the continued influence of stakeholders from the Middle East. Five of the top eight revenue generating clubs in the world now have Middle East based shirt sponsors and the involvement of Middle East sponsors is a key part in driving the commercial growth at many of Europe’s biggest clubs. Similarly, the 2013/14 season was one where the impact of Middle East owners was seen on the pitch, with Middle East owned champions in the top divisions of both England and France.”
A 29% increase in Premier League revenue in 2013/14 saw the Premier League further extend its lead as the highest revenue generating league in the world, with total revenue of $5.3 billion. England’s top twenty clubs now account for almost 20% of the European football market. The main driver of this growth was broadcast revenue which rose by 48%, fuelled by new domestic and international rights deals.
Jones added: “In 2013/14 even the Premier League club receiving the least from domestic league broadcast distributions earned more from this source than all but five other European clubs. Following recent announcements of commercial deals for a host of the largest clubs, we expect the Premier League to surpass the Bundesliga in commercial revenue terms and hence lead the world in all three key revenue categories from 2014/15.”
An eighth consecutive year of revenue growth saw the Bundesliga consolidate its position as the second highest revenue generating league in Europe, with total revenue rising 13% to $3.1 billion.
In Spain, La Liga clubs collectively grew revenue by 3% to $2.6 billion in 2013/14, with all of this growth attributable to the two Madrid clubs, with the other 18 clubs’ aggregate revenues down compared with the prior year.
Serie A clubs saw a small increase in total revenue of 1% to $2.3 billion in 2013/14 with the league continuing to have a greater reliance on broadcast revenue than any of the other ‘big five’ leagues.
Total revenue for Ligue 1 grew by 15% to over $2 billion in 2013/14, led by Paris Saint-Germain’s revenue growth of $102m.
From a costs perspective, for the first time since 2006/07, each of the ‘big five’ leagues reported a wages/revenue ratio at or below 70%, with four of the ‘big five’ leagues seeing improvements in their ratios in 2013/14 (Bundesliga 49%, Premier League 58%, Ligue 1 64%, Serie A 70%) with La Liga’s worsening to 60% from 57%. The overall wages/revenue ratio across Europe’s ‘big five’ leagues fell to 59%, its lowest level since 1999/00.
Dan Jones commented: “UEFA’s Financial Fair Play Regulations, together with cost control measures in certain domestic leagues, appear to be having an influence on the way in which clubs choose to spend increases in revenue, with less being spent directly on wages. In the past two seasons only 31% of revenue growth across Europe’s ‘big five’ leagues has been spent on wages, in the two years preceding that it was 61%”
The Premier League’s operating profit of $1 billion in 2013/14 was almost treble the previous record, set by the Bundesliga in 2012/13. 19 of the 20 Premier League clubs reported an operating profit and the league’s overall operating margin increased to 19%. Once again the Bundesliga was the only other ‘big five’ league to report an operating profit, although this fell by 5% to $339m.
Other key findings from the Deloitte Annual Review of Football Finance 2015 include:
• Driven in part by new broadcast rights deals for both the Premier League and Bundesliga, total broadcast revenue across the ‘big five leagues grew by 18% to $7.3 billion, contributing 48% of total revenues. • Revenue from sponsorship and other commercial sources increased by 18% to reach $5.4 billion, the second largest element of aggregate revenues across the ‘big five’ leagues. • Matchday revenue rose by 4% in 2013/14 and generated $2.6 billion across the ‘big five’ leagues. • A slight increase in attendances in the 2013/14 season saw the Bundesliga remain the league with the highest level of average attendance in Europe, at more than 42,600 people per game. The Premier League had the highest level of stadium utilisation in Europe (96%) in 2013/14, in a season that saw a record level of domestic average attendance (36,691). Ligue 1 average attendances increased for the second consecutive year to over 21,000 in 2013/14, whilst in Serie A they rose marginally to 23,011. The average attendance in La Liga remained static at 25,320. • The gap between the ‘big five’ leagues and other leading European leagues continued to widen in 2013/14. A number of leagues have entered into longer term arrangements with broadcast partners, notably in the Netherlands, Belgium and Denmark, to support the development of competitions and to provide more financial certainty to clubs. • Total revenues of $797m in 2013/14 once again saw England’s Football League Championship retain its position as the world’s highest revenue-generating second tier competition.
Notes to Editors: Exchange rate The average exchange rate for the year ending 30 June 2014 has been used to convert figures between Euros and Pounds Sterling to US dollars (£1 = €1.1958 = $1.6274)
About the Sports Business Group at Deloitte Over the last 20 years Deloitte has developed a unique focus on the business of sport. Our specialist Sports Business Group offers a multi-disciplined expert service with dedicated people and skills capable of adding significant value to the business of sport. Whether it is benchmarking or strategic business reviews, operational turnarounds, revenue enhancement strategies or stadium/venue development plans, business planning, market and demand analysis, acquisitions, due diligence, expert witness, audits or tax planning; we have worked with more clubs, leagues, governing bodies, stadia developers, event organisers, commercial partners, financiers and investors than any other adviser.
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