Champions League key for Ajax

The authoritative Swiss Ramble blogger reviews Ajax's accounts for 2018/19. He notes, 'Their 2018/19 accounts cover their most successful season in years when they won the Dutch league and cup double (for the first time since 2002) and reached the Champions League semi-final with a dazzling brand of football.'

Profit before tax shot up from €3m to €69m (€52m after tax), largely due to revenue more than doubling from €93m to a record €199m (thanks to the CL exploits) and profit on player sales rising from €39m to €73m. The price of success was expenses increasing by €74m. The wage bill grew €39m (74%) from €53m to €92m.

The club's €106m revenue growth was very largely due to the Champions League run with all three streams increasing: broadcasting surged €76m from €13m to €89m; match day rose €20m (63%) from €31m to €51m; and commercial was €11m (22%) higher at €60m.

Few clubs in the Eredivisie make big profits, e.g. in 2017/18 the highest was Feyenoord €16m. Therefore, Ajax's €69m pre-tax profit in 2018/19 is something special (though not completely unprecedented), a full €58m more than the closest challenger AZ €11m.

Ajax run a sustainable business model, reporting profits in eight of the last nine years (the only loss in 2015/16 was less than €1m). Over that period, they have accumulated €229m profits, averaging €25m a season. Two of the club’s highest ever profits came in last 3 years. However, they are still reliant on player sales to make a profit, earning a thumping great €321m from this activity in the last 10 years, averaging €64m a season since 2017.

The gap between Ajax and the two major domestic rivals has never been higher: Feyenoord €129m (previously €65m in 2012) and PSV €103m (previously €43m in 2011). Supports technical director Marc Overmars’ statement, “We need to become the Bayern Munich of our league”.

Even after doubling their revenue to €199m in 2018/19, the €653m gap between Ajax and the top club is virtually unchanged with Barcelona up to an incredible €852m. Overmars again: “It’s like being in Formula 1 and driving a DAF. It’s hard to pass the Mercedes and Ferraris."

To reinforce the enormous revenue disparity for Dutch clubs, the Eredivisie had €459m revenue in 17/18, just 9% of the Premier League’s €5.4 bn. Also miles behind Germany €3.2 bn, Spain €3.1 bn, Italy €2.2 bn and France €1.7 bn. Below Russia €813m & Turkey €731m too.

For some perspective, the club finishing top of the Premier League received around €170m, while the bottom club got €109m, i.e. 12 times as much as Ajax €9m. The Dutch champions only get slightly more than an English Championship club not benefitting from parachute payments.

The importance of Champions League qualification for Ajax cannot be overstated. Including €17m gate receipts, they earned €98m in 2018/19, which represented almost half of their total revenue. Even that stat is too low, as it does not include related increases in sponsorships.

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The Political Economy of Football V2

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