Top 20 clubs to break through £10 billion barrier

Blogging from the European financial capital of Zurich, the authoritative Swiss Ramble takes a look at the latest Deloitte Money League with Barcelona topping the table this year. Spanish one-two for the second consecutive year, though Barcelona and Real Madrid switched places. No revenue growth at Madrid, but plan to emulate Barca by taking merchandising in-house next year. Atleti £324m and Valencia £163m posted impressive growth, but miles below big two.

The combined revenue of the top 20 clubs rose by €939m (11%) to a record €9.3 bn. Main driver of growth was broadcasting, up €575m (16%), though commercial was also significantly up €312m (9%), while match day rose €51m (4%). On track to break €10 bn in next few years.

The gap between top and bottom, defined as 1st place to 20th place, increased from €553m to a record €633m. This has been on a steadily upward trend, more than tripling from €207 million in 2006. 'In other words, it’s the usual story of the rich getting richer.'

The financial threshold for membership of the Money League club has increased to more than €200m for the first time at €207m. This has become increasingly challenging, basically doubling in the 10 years since 2009 from €102m.

Broadcasting remains the most valuable revenue stream with its share rising from 42% to 44%, though not as high as 45% peak in 2016/17. Commercial was unchanged at 40%, while match day further fell to 16% (down from 26% in 2009).

Three clubs earned more than a quarter of a billion pounds from broadcasting: Liverpool £264m, Barcelona £263m and Manchester City £253m, closely followed by Spurs £244m and Manchester United £241m. Importance of Champions League is evident, especially after 50% increase in prize money in 2018/19.

There are no fewer than five English clubs in the top ten, including Manchester United £627m, Liverpool £533m, Tottenham Hotspur £459m, and Chelesa £452m. However, Arsenal £393m dropped two places to 11th, their lowest position since 2000/01. [This shows how problems on the pitch can impact revenues.]

English strength is further reflected in the top 30 with 11 representatives, though this is two fewer than last year and well down from the peak of 17 in 2014. To underpin the Premier League’s strength, Wolves £172m are in 25th place immediately after promotion to the top tier.

Total revenue for the top 20 clubs rose £790m (11%) from £7.4 bn to £8.2 bn, split between broadcasting £3.6 bn (44%), commercial £3.2 bn (40%) and match day £1.3 bn (16%). Individual clubs have a very different revenue mix: TV Everton 75%, commercial PSG 57%, match day Arsenal 25%.

Revenue was essentially flat at Chelsea up £4m, Arsenal £4m and Real Madrid £2m, while it actually declined at Everton £(1)m and Roma £(18)m. One of the main drivers here is a failure to qualify for the Champions League (or Europe at all in the case of Everton).

The importance of Champions League qualification is clear, as this was the main driver behind the large growth at Liverpool (£455m to £533m) and Spurs (£379m to £459m). In stark contrast, Europa League participation meant miniscule revenue growth at Chelsea and Arsenal.

The importance of the Premier League TV deal to medium-size English clubs is highlighted by Everton and West Ham generating 71% and 67% respectively of their revenue from broadcasting, despite not qualifying for Europe. Top placed clubs are far less reliant on TV than smaller clubs.

The Swiss Ramble notes, 'The majority of the increased revenue at the top 20 clubs in 2018/19 was driven by broadcasting £544m (18%), due to new TV deals for UEFA competitions, followed by commercial £256m (9%) with match day a long way back £45m (4%). The growth profile is very different at each club.'

In England Manchester United £627m still have the highest revenue but will come under pressure next year from Manchester City £538m and Liverpool £533m. Spurs £459m are up to 8th, the club’s best ever position, overtaking Chelsea £452m and north London rivals Arsenal £393m. Premier League promotion saw huge increase at Wolves £172m.

The highest placed club outside the Big Five leagues was Ajax, whose revenue almost doubled to £176m after a great Champions League run. There are two Portuguese clubs in the top 30: Benfica £174m and Porto £155m. The sole Russian representative is Zenit Saint Petersburg £159m.

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The Political Economy of Football V2

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