Ajax supporters could probably find some choice words to describe the club’s 2023/24 season, though the board opted for “disappointing” in the recently published annual report.
This was completely understandable, given that Ajax slumped
to fifth place in the Eredivisie, while “another sporting low point” came when
they crashed out to amateur club USV Hercules in the second round of the KNVB
Cup.
Despite only competing in the Europa League, they still
failed to get out of the group, thus dropping down to the Conference League,
where they were eliminated by Aston Villa in the last 16.
As the club pointed out, financial prospects are often
driven by sporting results, so the lack of success last season has also been
reflected in the bottom line. As a
result, Ajax went from an impressive €55m pre-tax profit to a €13m loss in
2023/24, a massive €68m deterioration. This was largely due to revenue falling
by €44m (23%) from €196m to €152m, while profit from player sales decreased by
€35m (30%) from €117m to €82m.
Ajax’s revenue was hit by not playing in the Champions
League, which contributed to a €33m (59%) reduction in broadcasting from €56m
to €23m, while commercial fell €14m (16%) from €90m to £76m, mainly due to
lower merchandising.
To date, Ajax’s €13m pre-tax loss is the highest in the
division, which is in stark contrast to 2022/23, when their €55m profit was the
best result. Interestingly, all of the other four clubs that have to date
posted their 2023/24 accounts have made a profit: AZ €17m, Feyenoord €13m, PSV
Eindhoven €13m and Twente €7m.
Ajax’s figures would have been worse without €82m profit
from player sales, mainly thanks to their tried and trusted strategy of selling
talent to the Premier League for big money.
However, the board admitted that the club had gone too far in the summer
of 2023, “Looking back, we must conclude that the departure of key players at
the start of the season could not be absorbed.
Even after the €44m lost during the pandemic, Ajax have
generated €194m of profits in the last decade. In fact, they have made money in
ten of the last 14 years, which is pretty good in the football world. However, the club said that it expects
another loss in 2024/25, due to again only qualifying for the Europa League,
while making very little from player sales to date.
Despite last season’s fall, Ajax have earned a hefty €216m
from European competitions in the last 5 years, which is more than twice as
much as PSV €102m and Feyenoord €79m. It
is also around four times as much as Ajax earned from the domestic TV deal in
this period.
E urope
Therefore, the importance of Champions League qualification
to the Ajax business model cannot be over-stated. They averaged €57m TV money a
year in the five seasons up to 2022/23, which is much more than last season’s
€11m from the Europa League.
Ajax’s average attendance of 50,568 was the largest in the
Netherlands, around 4,000 more than Feyenoord 46,794, followed by PSV 34,217
and Twente 29,685. As in previous years, season tickets were sold out in
2023/24.
Even after last season’s decrease, Ajax’s €76m commercial
revenue is comfortably the highest in the Eredivisie, well ahead of PSV €56m
and Feyenoord €47m, though the gap has narrowed.
Wages
Ajax’s wage bill fell €8m (8%) from the club record €110m to
€102m, mainly due to lower bonuses for worse sporting results. The club had noticeably shifted its approach
six years ago, when wages almost doubled from the €50m level. Last summer’s
clear-out moved some big earners off the payroll, but not enough to move the
needle that much.
Despite the decrease, Ajax’s €102m wages were far more than
their Dutch rivals, e.g. PSV were €25m lower with €77m, while Feyenoord’s €66m
was only around two-thirds as much. Twente managed to finish third in the
league with only €23m wages, while fourth placed AZ paid €33m. In short, Ajax
massively under-performed their budget last season.
Ajax have been a well-run club from the financial
perspective for many years, but the wheels have come off recently.
It has always been evident that their business model has
been very reliant on two factors: (a) qualification for the Champions League;
(b) profitable player sales. Or, as the club put it, “Ajax’s result is highly
dependent on the sporting scenario and outgoing transfers.”
Therefore, Ajax only qualifying for the Europa League in the
last two seasons has really hurt their finances, as will the low player trading
profit this season (unless they do more business in the January window). As a consequence, the club said that
“additional structural cost reductions will be implemented this season”, which
makes sense for the bottom line, though it might make their recovery more
difficult.
That said, Ajax still have the best financial resources in
the Eredivisie in almost every category, so they should be fine, but that
assumes that the management will stop dropping the ball.
Ajax have been pretty successful for a number of years, both
on and off the pitch, but are finding life more of a challenge these days,
though the board put a philosophical spin on the club’s situation, “Without
losses, victories have no value.”
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