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.

Comments

Popular posts from this blog

Fulham requires big funding from owner

After lengthy delays, Fulham’s shiny, new Riverside Stand has finally opened, creating “a unique Thameside destination with first class facilities for supporters and partners on match days, as well as for the wider community year-round”. This ambitious project has increased Craven Cottage’s capacity by around 4,000 to 29,600, while it has also taken advantage of the club’s fantastic location and wealthy catchment area by including two Michelin star restaurants, a rooftop swimming pool, corporate hospitality and event space, all benefiting from views of the Thames. Chief executive Alistair Mackintosh observed, “Fulham is the sort of club that can have a business class or first class and have fans that turn left on a plane.” Indeed, there is also an exclusive members club – with a football season ticket as an optional extra. It’s fair to say that “the times they are a-changing”, as this is a long way from the traditional pie and a pint. However, in a world where clubs face the tw...

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...

A poor financial record, but new hope at Everton

I recently saw an amusing video online in which a group of Everton fans were rebuked in jest for being hopeful.  Football fans in general tend to swing between excessive optimism and excessive pessimism, but for many it seems that moaning is in their bloodstream (Spurs fans probably take the trophy).  However, Everton fans have had plenty to moan about on and off the pitch.   Let’s hope that a new era is about to begin for this grand old club. Everton’s 2023/24 financial results covered a fairly momentous season, when they ended up 15th in the Premier League, though they would finished three places higher if they had not received an 8-point deduction for breaching the Premier League’s Profitability and Sustainability Regulations (PSR). It was a worrying time for Everton fans, as the club faced a “perfect storm” of issues, including large financial losses, an ever increasing debt burden, a challenging stadium build and the tortuous sale of the club. There were eve...