UK_SBG_FML08.pdf

February 2008

Football Money

League

Gate receipts

Edited by

Dan Jones

Authors

Rich Parkes, Austin Houlihan, Grant Ingles,

Martyn Hawkins and Amelia Ashton-Jones

Sports Business Group at Deloitte

PO Box 500, 2 Hardman Street, Manchester,

UK M60 2AT

Telephone: +44 (0)161 455 8787

Fax: +44 (0)161 455 6013

E-mail: sportsteamuk@deloitte.co.uk

www.deloitte.co.uk/sportsbusinessgroup

February 2008

Football Money League

Contents

Welcome

by Dan Jones

Ups and downs

The Deloitte Football Money League

Size matters

by Martyn Hawkins

Back to the future

by Austin Houlihan

Building giants

by Grant Ingles

Football Money League

Welcome

By Dan Jones, Partner, Sports Business Group at Deloitte.

Welcome to the eleventh edition of the Deloitte Football Money

League, in which we profile the largest clubs in the world’s most

popular sport. Being released less than nine months after the end of

the 2006/07 season, and as soon as all the clubs’ revenue figures

are available to us, the Money League is the most contemporary and

reliable analysis of clubs’ relative financial performance.

Chart 1: Total revenues 2006/07

€

400

350

In this publication we compare clubs using revenue from day to day

football business operations. We believe that our methodology –

outlined in more detail in ‘How we did it’ – represents the best

publicly available financial comparison. We are aware that in some

cases clubs have other financial performance measures that they may

consider to be a better basis for comparison. Some would prefer a

profit measure, rather than a comparison of revenues. Even with

regard to revenues there is debate as to the ‘right’ figure. Some have

publicised their ‘gross revenue’ i.e. including the amounts earned by

outsourced partners from deals with clubs rather than the ‘net’

amount that is recognised in the club’s accounts and/or the inclusion

of player transfer receipts. Others would prefer to include revenues

from sources not directly connected with day to day football club

operations, such as property development.

300

250

200

150

100

Some analysts would shy away from financial measures altogether

and use alternative methods to determine the relative size of

football clubs – including measures of fanbase, attendances, TV

audiences, or on-pitch success. We welcome, and in this edition

provide some input to, this debate. Nonetheless, we have stuck with

our tried and tested measure, and the results again provide a

fascinating snapshot into the business development of the world’s

favourite sport. Whilst our analysis focuses on the business of

football, we do, of course, respect that football is a game above all

and it is more important to win trophies than to generate money.

Source: Deloitte analysis.

“The top 20 clubs’ collective

revenues grew by 11% to

€ 3.7 billion in 2006/07, the

highest rate of growth since

2002/03. The 20 clubs now

generate more than three times

the combined revenue of the

clubs in the first Money League

in 1996/97.”

The level of interest in football shows no sign of waning and,

especially for our Money League clubs, revenues continue to grow.

The top 20 clubs’ collective revenues grew by 11% to

€

3.7 billion in

2006/07, the highest rate of growth since 2002/03. The 20 clubs

now generate more than three times the combined revenue of the

clubs in the first Money League in 1996/97, while the club which

topped the first Money League, Manchester United, now generate

more in matchday revenue alone than it did in total in 1996/97.

Congratulations to Real Madrid, who complete a hat-trick of seasons

in first position. They become the first club with revenue above

€

400m barrier in

future seasons. Manchester United, whose revenue leapt by 30%,

pass the

350m, and seem well on the way to break the

€

300m mark to retake second place even on a net, not

gross, revenue basis, while Barcelona consolidate their strong

performance in recent seasons and complete the top three. Arsenal’s

move to the Emirates Stadium has transformed their revenues and

they rise four places into the top five for the first time, joining United

Football Money League

“Germany undertook significant

stadium development to stage

a tremendously successful 2006

World Cup and its clubs have

enjoyed a boost in attendances

and revenues as a result.”

The continued interest in the game, deregulation of broadcast

markets, convergence of technologies and recognition of the power

of football as content that pulls large audiences to live broadcasts

continue to fuel revenue growth. The implementation of the

proposed move to collective selling in Italy in 2010 is likely to have

significant implications for our Italian representatives’ revenues, and

will leave Spain out on its own as the only Big Five country retaining

the individual sales model. Even there, signs are emerging of

pressure for a future move to collective selling.

The most successful and strategically clear thinking clubs continue

to diversify and broaden their revenue mix to balance their business,

protect against shifts in the broadcast market and steal a march on

their competitors. Stadium development has underpinned many of

the recent changes in both the composition, and hierarchy, of the

Money League. Since the millennium a number of major stadium

developments have taken place, delivering impressive revenue

increases as a result, and various commercial initiatives – sometimes

including new ideas from other sports and/or countries – are

evolving. We comment on recent developments in both the stadium

and broadcasting markets in feature articles in this edition, and will

continue to track their impact in future Money Leagues.

and Chelsea. This is the first time that any country has had three

clubs in the Money League top five. Tottenham Hotspur also rise four

places, and are close to a top ten place themselves, after their most

successful on-pitch performance in years.

Germany undertook significant stadium development to stage a

tremendously successful 2006 World Cup and its clubs have enjoyed

a boost in attendances and revenues as a result. This, together with

the impact of a new broadcasting deal, helped the Bundesliga to its

record level of Money League representation this year, with four

clubs in the top 20.

This year we have six English representatives, four from Germany,

and Italy, three from Spain, and two from France and one from

Scotland. However, the first year of new Premier League

broadcasting deals could see next year’s Money League looking very

different. With four English clubs already ‘bubbling under’ the lower

reaches of our top 20 we think 2007/08 could see England providing

half the Money League clubs. The next edition could also see the

entry level for a top 20 place raised to be revenue above

As the football business continues to develop, further evidence of

sustained financial polarisation in the sport emerges. We still have

11 ever present clubs, plus Chelsea (who have appeared in all but

one edition). And, although AS Roma became the first club to

break into the top ten since Newcastle United in 2002/03, this was

largely due to the extraordinary one-off relegation of Juventus to

Serie B as a result of the ‘Calciopoli’ scandal. Juventus themselves

drop to twelfth position, and become the first, and we strongly

expect last, club from outside a country’s top division to appear in

the Money League. Their return to Serie A and strong performance

to date this season means that the ‘traditional’ top 10 is likely to be

back in place next year.

€

100m

(£67.3m) (a level achieved by only Manchester United in our first

edition, just over a decade ago). We also expect the 2009 edition to

be the first year in which only the Big Five countries are represented.

“Successful and strategically

clear thinking clubs continue

to diversify and broaden their

revenue mix to balance their

business, protect against shifts

in the broadcast market and steal

a march on their competitors.”

As these polarised positions are cemented, some notable ‘leagues

within the league’ are starting to appear. Arsenal, in fifth, even

without their property development revenues, have a lead of nearly

€

40m over Milan in sixth place, while the gap between Inter and

Roma in ninth and tenth places is another

€

40m. Climbing towards

the top of the Money League requires a step change in revenues.

A good season on the pitch alone cannot bridge these gaps.

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