Sound finances at Bayern

The authoritative Swiss Ramble reviews the finances of Bayern Munich. Despite the significant impact of COVID, the club “achieved sound financial results”, once again posting a pre-tax profit, though down from €17m to €5m (€2m after tax). Revenue (club definition) fell €54m (8%) from €698m to €644m, largely offset by €42m cut in expenses.

Bayern were one of only three clubs in the Bundesliga to post a profit in 2020/21, due to “sensible management and not spending more than we earn”, though their €5m was just below RB Leipzig’s €8m. Some clubs lost a huge amount of money, especially Hertha €78m. In fact, the Bavarians have now been profitable for an amazing 29 years in a row, generating €241m pre-tax profit in the 4 years before COVID.

For the second year in a row Bayern retained 3rd place in the Deloitte Money League in 2021, with their €611m revenue only surpassed by Manchester City €645m and Real Madrid €641m.

At €5m Bayern were one of a small number of European clubs that were profitable in 2020/21, along with Man City €6m and Real Madrid €2m. In stark contrast, other clubs had some staggering losses, including Juventus €208m, PSG €225m, Inter €239m and especially Barcelona €555m.

The income from player sales almost halved, falling from €64m to €33m, mainly Thiago’s move to Liverpool. This was partly due to the transfer market being depressed by COVID, though some clubs still made good money from player trading, e.g. Real Madrid €106m and Man City €77m.

Like many clubs Bayern have become increasingly reliant on player trading. Although income fell to €33m in 2021, they earned an impressive €154m in the previous 2 years. Few big money sales in 2021/22 (Alaba left on a free), but this season was better.

The revenue gap between Bayern and Borussia Dortmund has narrowed in recent years, but was still as much as €274m in 2021. Put another way, Bayern’s €611m revenue was nearly 80% higher than Dortmund’s €338m, which is a huge difference between first and second ranked clubs in a country.

Commercial income fell €15m (4%) from €360m to €345m, though the small decrease was a pretty good performance during the pandemic. In fact, this was the highest commercial revenue in Europe, ahead of PSG €337m, Real Madrid €322m.

Broadcasting revenue rose €51m (25%) to €255m, a club record for this revenue stream, mainly from UEFA TV money, up €54m to €136m, due to income deferred for games played after 2019/20 accounting close. Still far below Man City €336m, due to low Bundesliga TV money.

The wage bill rose €33m (10%) from €340m to €373m, which means that wages have risen by €108m (41%) since 2017. One reason for the increase in 2021 was the players taking a voluntary salary cut in the previous season. These were by far the highest wages in Germany.

Baern enjoy a major competitive advantage in Germany, as their €373m wage bill is a hefty €158m (73%) more than Borussia Dortmund €216m, the highest ever gap. This difference is much higher than a similar comparison in England, Spain and Italy, only smaller than PSG’s lead in France.

wages to turnover ratio increased (worsened) from 54% to 61%, obviously impacted by COVID revenue losses, though this was still one of the best figures in Europe, only behind Tottenham Hostpur 57% and Real Madrid 58%, but miles better than the likes of PSG 88%.

Fulham requires big funding from owner

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The Political Economy of Football V2

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