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.

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The Political Economy of Football V2

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