Skip to main content

Ajax have a sustainable business model

The authoritative Swiss Ramble has reported on Ajax's  2019/20 accounts.

Profit before tax fell €42m from €69m to €27m (profit after tax down from €52m €20m), largely due to revenue dropping €37m (16%) from a record €199m to €162m and expenses increasing by €17m to €220m, partly offset by profit on player sales rising €12m to €84m.

The club are known for their strategy of developing and selling players. They have earnt €400m from this activity in the last 10 years, averaging €69m a season since 2017.

Despite the fall, the club's €27m profit is still the highest in the Eredivisie, well ahead of the next highest, AZ €8m. As a rule, very few Dutch clubs make big money, so Ajax €69m surplus in 2018/19 was something special and unlikely to be repeated.

Ajax have a sustainable business model, reporting profits in nine of the last 10 years (only loss was €1m in 2015/16). In that period, they have accumulated over a quarter of a billion Euros profit, averaging €26m a season. However, they do expect a loss in 2020/21 due to Covid.

The €42m revenue fall was largely due to less progress in the Champions League and pandemic impact. As a result, broadcasting dropped €33m (37%) from €89m to €56m, while match day was down €9m (18%) from €51m to €42m. Commercial increased €5m (8%) from €60m to €65m.

There is an enormous revenue disparity for Dutch clubs, the Eredivisie had €594m revenue in 2018/19, just 10% of the Premier League €5.9 bn. Also miles behind Spain €3.4 bn, Germany €3.3 bn, Italy €2.5 bnn & France €1.9 bn. Also below Russia €752m and Turkey €748m.

The Swiss Ramble estimates that Ajax earned €48m from Europe in 2019/20: €47m from the Champions League group stage plus another €1m after dropping down to the Europa League. Much lower than €79m earned the previous season, when they reached the Champions League semi-final.

Ajax have earned a chunky €152m from European competition in the last five years, which is even more impressive considering they did not reach the group stage of Champions League or Europa League in 2017/18. Next highest for Dutch clubs: PSV €94m and Feyenoord €30m. The importance of Champions League qualification for Ajax cannot be overstated. Including €10m gate receipts, they earned €56m, which was around a third of their total revenue.

Average attendance of 52,300 remains the highest in the Eredivisie, around 11,000 more than Feyenoord 42,200. The only other Dutch clubs above 20,000 were PSV Eindhoven with 33,600 and Twente Enschede 27,200.

The club's €65m commercial revenue is the highest in the Eredivisie, well ahead of Feyenoord €45m and PSV €40m. However, it is less than a fifth of the elite European clubs, such as Barcelona €384m, PSG €363m and Bayern Munich €357m. No wonder Ajax aspire to be the Bayern Munich of their league.

Labels:

Comments

Post a Comment

Popular posts from this blog

Threat of financial calamity removed from Baggies

West Bromwich Albion had effectively been in decline ever since the club was sold to a Chinese consortium in August 2016, paying a figure north of £200m to buy former owner Jeremy Peace’s stake. Controlling shareholder Guochuan Lai’s ownership was fairly disastrous for the club, but his unloved tenure finally came to an end after Bilkul Football WBA, a company ultimately owned by Florida-based entrepreneur Shilen Patel and his father Dr Kiran Patel, acquired an 87.8% shareholding in West Bromwich Albion Group Limited, the parent company of West Bromwich Albion Football Club. This change in ownership was urgently required, due to the numerous financial problems facing West Brom, including growing high-interest debt and serious cash flow concerns, following years of no investment from the former owner. Indeed, West Brom’s auditors had already rung the alarm bell in the 2021/22 accounts when they cast doubt on the club’s ability to continue as a going concern without making player s
1 comment
Read more

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
Post a Comment
Read more

Spurs to sell minority stake

Tottenham Hotspur is in talks to sell a minority stake in a deal that could value it at up to £3.75 billion and pave the way for Joe Lewis and his family to sever ties with the Premier League football club. Tottenham chairman Daniel Levy is seeking an investment that values the club at between £3.5 billion and £3.75 billion, including debt. While the terms of any deal have not been finalised, City sources expect Spurs to sell about 10 per cent. The club is being advised by bankers from Rothschild on the sale. Tottenham wants to raise fresh capital for new player signings and to help fund the development of an academy for its women’s team, as well as a 30-storey hotel next to its north London stadium. The financier Amanda Staveley, who brokered the deal for Saudi Arabia’s Public Investment Fund to take over Newcastle United, is understood to be among the parties to have expressed an interest in Tottenham. Staveley’s fund, PCP Capital Partners, has raised about £500 million to depl
Post a Comment
Read more