Borussia Dortmund rely on player sales

The authoritative Swiss Ramble reviews the 2019/20 accounts of Borussia Dortmund. They went from €22m profit before tax to €47m loss (€44m after tax), mainly due to profit on player sales falling €43m to €40m. Despite the COVID restrictions, revenue was basically flat at €379m, but operating expenses rose €25m and net interest payable was €2m higher.

The €47m loss was their first since 2010. In the nine years up to 2019, they generated €227m profits, averaging €25m a season. In light of the high degree of uncertainty related to all revenue streams, the board expects a net loss in 2021 between €70m and €75m.

The only revenue item to decrease was match operations, down €12m (27%) to €33m, but the pandemic restricted growth in broadcasting, up €3m (1%) to €170m, commercial, up €10m (6%) to €168m, and other operating income, up €1m to €9m.

In 2018/19, i.e. before the pandemic, the €22m pre-tax profit was fifth highest in the Bundesliga, only surpassed by Bayern Munich €75m, Eintracht Frankfurt €56m, Hoffenheim €26m and Mainz 05 €25m. Their €17m after tax was fourth best.

BVB have been increasing their profits from player sales, although a fair way below the Italian clubs. The club benefited from €40m profit on player sales, mainly Diallo to PSG, Alacer to Villarreal, Weigl to Benfica, Philipp to Dynamo Moscow and Bruun Larsen to Hoffenheim, though €43m lower than prior year.

Broadcasting is (just) the most important revenue stream at the club with 45%, having overtaken commercial (44%) in the last two years. TV share has more than doubled since 2010, while commercial has fallen from 57%. Match operations has also declined from 22% to 9%

Bundesliga clubs including BVB benefited from the new TV deal in 2017/18, which shot up 85%, but the new deal from 2021/22 will see a 4% reduction. Still third best in Europe, though a long way below Premier League and La Liga, while Ligue 1 will narrow the gap.

Based on the Swiss Ramble's estimate, the club earned €69m from the Champions League after going out in the last 16, a bit higher than prior season’s €66m. Worth noting the influence on Champions League money of UEFA coefficient payment (based on performances over 10 years), where they have 10th highest ranking of clubs competing this season, giving them €25m.

The club have earned a healthy €232m from European competition in the last five years, though Bayern Munich €402m is almost twice as much.

The wage bill rose €10m (5%) from €205m to €215m, which means wages have grown by almost €100m since 2015 with wages to turnover ratio worsening from 42% to 57% (still very respectable). Players and coaching staff have taken pay cuts, saving “a double-digit millions amount”.  Despite the growth over this period, the wage bill is still significantly lower than Bayern Munich: in 2018/19 the gap was higher than it has ever been at €151m (€205m vs. €356m).

Wolves get raw deal from FFP

I used to see a lifelong Wolves fan for lunch once a month. He was approaching ninety, but still went to games. Sadly he passed away the other week. As football finance guru Kieran Maguire has noted, Wolves continue to be constrained by financial fair play rules. Radio 4 this morning described them as this year's 'crisis club' and the pessimists have certainly been piling in. Martin Samuel wrote sympathetically in the Sunday Times yesterday, saying that the Premier League drives talent away with regulatory red tape: 'Why could Al-Hilal sign Neves? Because Wolves needed the money. And why did Wolves need the money? Because the club had to comply with an artificial construct known as financial fair play. So Wolves are going skint, yes? No. There is no suggestion that Wolves are in financial trouble, only that they are failing to meet the rigours of FFP. Wolves’ owners appear to have the money to run the club, and invest in the club, and in fact came up with a pow

Gold standard ground boosts Tottenham's income

The gold standard in European football grounds is the Tottenham Hotspur stadium in north London, a £1bn construction project completed in 2019. Its impact on the club’s finances has become increasingly clear as the effects of the pandemic have faded. Previously, the average fan would spend less than £2 inside the ground on a typical match day, but now that figure is about £16, thanks to new facilities including the longest bar in Europe and an on-site microbrewery. Capacity has gone up from 36,000 at the club’s previous home of White Hart Lane to 62,000. The new stadium — built on land adjacent to White Hart Lane — has opened the door to a broad range of other events that have helped to push commercial income up from €117mn in 2018 to €215mn in 2022. Last year, Tottenham hosted US singer Beyoncé for five nights on her global Renaissance tour, two NFL matches, as well as rugby games and heavyweight boxing bouts. Money brought in from football has gone up too. Match day income is

Charlton takeover approved

The long awaited takeover of Charlton Athletic by SE7 Partners from Thomas Sandgaard has been approved: https://londonnewsonline.co.uk/se7-partners-obtain-efl-approval-for-charlton-athletic-takeover/ Charlton have had unhappy experiences with owners for over a decade, so how this works out will remain to be seen. There is certainly potential there, but will it be realised? This interview with Charlie Methven gives detail not available elsewhere: https://thecharltondossier.com/charlie-methven-on-the-record/

The Political Economy of Football V2

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