The in betweeners of La Liga

As I struggle in my first steps to learn Spanish, the authoritative and no doubt multi-lingual Swiss Ramble reports with his usual authority on the 2018/19 accounts of Atletico Madrid. Profit before tax almost tripled from €12m to €34m (profit after tax up from €4m to €14m), as revenue rose €71m (23%) to a record €384m and profit on player sales shot up €70m to €86m.

The club's profits have been improving with their last loss reported eight years ago in 2011. Since then, they have reported aggregate profits of €73m, including their highest ever surplus of €34m in 2019 (€14m after tax).

The main driver of the €71m revenue increase was broadcasting, up €47m (30%) to €205m, mainly due to new Champions League TV deal. Commercial also rose €20m (21%) to €112m, while match day was up €4m (7%) to €66m.

Most clubs in La Liga are profitable, but the club's €14m profit after tax is towards the top of the table. In 2018/19 they find themselves between Real Madrid €38m and Barcelona €5m in terms of profitability. The highest loss reported in 2017/18 was Valencia €36m (the nearest La Liga club to my daughter).

The club have made a €320m profit from player sales in the last nine years, including €86m in 2019. If these sales were excluded, last season’s loss would have been €53m. The 2020 budget includes €139m profit from this activity, mainly Antoine Griezmann’s huge sale to Barcelona.

Spanish football is, of course, financially dominated by two giant clubs. The revenue shortfall to Barcelona €852m grew to €469m, though the gap to Real Madrid narrowed, but was still €374m. On the other hand, Atletico are significantly outpacing Sevilla and Valencia, generating between €140m and €190m more than these rivals. Essentially, Atletico are the 'in betweeners' of La Liga.

With the introduction of a collective TV deal for La Liga, Barcelona €155m and Real Madrid €145m still receive by far the highest TV income from La Liga’s TV deal, but Atletico's share grew to €111m (€119m less €8m liabilities), then a big gap to Sevilla €75m & Valencia €73m. Lowest payment to Huesca €41m.

The club will benefit from La Liga international TV rights rising by 30% in 2019/20, giving a total of €2.0 bn. Although still a long way behind the Premier League €3.4 bn, it is comfortably ahead of the others: Bundesliga €1.4 bn, Serie A €1.3 bn and Ligue 1 €1.2 bn.

As a result of the club's success in Europe in recent years, they had the 4th best UEFA coefficient ranking, giving them €32m right off the bat. They are only behind Real Madrid €35m, Barcelona €34m and Bayern Munich €33m. One of the club's strategic objectives is to compete in the Champions League, which has contributed to them earning €308m in Europe in the last five years, though still a fair way below Real Madrid €387m and Barcelona €353m.

The wage bill rose €30m (14%) to €242m, though wages to turnover ratio fell from 68% to 63%. This means that wages have almost quadrupled from €64m in 2013, though revenue is also up from €120m to €384m in the same period. Despite the growth, the club's €242m wage bill is still a fair way behind Europe’s elite clubs. As just one comparison, they are nearly €100m below Juventus €328m, who eliminated them from last year’s Champions League.

Thanks again to the Swiss Ramble for his valuable evidence-based insights.

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The Political Economy of Football V2

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