27 consecutive years of profit at Bayern Munich

The Swiss Ramble blogger applies his forensic skills to the 2018/19 accounts of Bayern Munich. Profit before tax increased from €46m to €75m (profit after tax €52m). Revenue (per Bayern’s definition) rose €93m (14%) to €750m including €90m profit on player sales. The board described the figures as 'outstanding', as both revenue and profit set record highs.

Amazingly this is the 27th consecutive year that Bayern have been profitable. In fact, 2019 was the highest profit in the club’s history, both before and after tax. The club has accumulated nearly a quarter of a billion Euros profit in the last 4 years alone (€242m).

Excluding player sales, revenue rose €31m (5%) from €629m to €660m, mainly due to TV, up €34m (20%) to €211m, though commercial was also up €8m (2%) to €357m. On the other hand, match day down €11m (11%) to €92m (partly due to staging two fewer Champions League matches).

Profit on player sales was €62m higher at €90m. The club benefited from €90m profit on player sales, including Hummels to Dortmund, Vidal to Barcelona, Rudy to Schalke and Bernat to PSG. This was their highest ever profit from this activity, but still lower than most other elite clubs, e.g. PSG €145m and Liverpool €140m.

Bayern have become increasingly reliant on player sales with average annual profits rising from just €10m from 2010 to 2013 to €49m in the last 6 years. This season’s profit is much lower (only Sanches & Friedl to date), though the January transfer window is still to come.

Bayern have long been one of the most profitable clubs in Europe, though the riches of the Premier League mean that four English teams reported higher profits than Bayern’s €75m in 2017/18 with Tottenham Hotspur €157m and Liverpool €141m both around twice as much.

Commercial remains the most important revenue stream at the club with 54%, but this has fallen from 60% in 2014, while broadcasting has grown from 22% to 32% in the same period. Match day has also declined from 18% to 14%.

Commercial income grew €8m (2%) to €357m, comprising sponsoring and marketing €197m, merchandising €92m, Allianz Arena €35m and other commercial activities €34m. This means this revenue stream has essentially been flat for the last four years. Already in 2017/18 Bayern lost their place as the most commercially successful club in world football, overtaken by Real Madrid. Barcelona and PSG have almost certainly overtaken them in 2018/19.

Bayern have an excellent kit deal with Adidas (€60m a year), a good shirt sponsorship agreement with Deutsche Telekom €35m, Qatar Airways sleeve sponsor €10m and Allianz stadium naming rights €6m. The total of €111m is more than twice Dortmund’s €50m.

Despite the impressive €31m growth, the gap to the top club by revenue has widened in 2018/19, as Barcelona revenue surged €162m to €852m. Growth also lower than PSG €96m, Juventus €69m, Manchester United €42m and Manchester City €36m, but more than Real Madrid €6m. However, these deals are a fair way below the leading Spanish and English clubs (plus PSG) with Real Madrid earning almost twice as much: Emirates €70m & Adidas €110m (from 2020). No wonder Bayern we’re so disappointed that the mooted €80m deal with BMW was not concluded.

Bayern have earned significantly more revenue (€319m) from European competition than any other German club in the last 5 years. The closest challenger is Dortmund with €195m (i.e. €124m lower), followed by Schalke €118m, Leverkusen €109m and Mönchengladbach €64m.

The wage bill shot up €34m (11%) to €336m, which means that wages have risen by €109m (48%) since 2015. Wages to turnover ratio has steadily risen from 44% to 51% in the last few years. Despite the increase in wages to turnover ratio from 48% to 51%, Bayern have one of the lowest ratios among the leading clubs, only beaten by Tottenham 39% and Real Madrid 48%, but significantly better than the likes of Juventus 66%, Barcelona 59% and Manchester City 59%.

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The Political Economy of Football V2

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