The Political Economy of Football V2

As Ajax has pointed out in the past, its financial prospects are often driven by sporting results, so the lack of success has also been reflected in the bottom line. As a result, Ajax’s pre-tax loss significantly widened from €13m to €52m, which is the worst result in the club’s history, reports the Swiss Ramble. As Shashi Baboeram Panday, the finance director, explained, “The result is a consequence of the past few years: not playing the Champions League and having the cost management that comes with the Champions League. As a result, there is a loss.” The deterioration was very largely driven by much lower profit on player sales, which dropped €72m from €82m to just €10m. Revenue actually rose €26m (17%) from €152m to €178m, while operating expenses decreased €3m (1%) from €242m to €239m and net interest payable more than halved from €6m to €3m. After tax, the loss was smaller at €37m, due to a €14m tax credit, but this was still almost four times as much as the prior year’s ...

PSV Eindhoven celebrated their 110th anniversary in some style in 2023/24, as they won their 25th league title, while they also reached the last 16 of the Champions League and won the Johan Cruyff Shield, though they were eliminated in the quarter-finals of the KNVB Cup by Feyenoord. The club said that the 2023/24 season was “not only a sporting success, but also a financial success”, as they managed to post a €13.2m pre-tax profit (€9.7m after tax), though this was a little lower than the previous year’s €17.5m. This was driven by a huge new club record for revenue, which shot up €51.5m (51%) from €100.6m to €152.1m, though this was partly offset by profit from player sales halving from €61.1m to €31.3m. PSV’s revenue growth was on the back of doing well in Europe, which led to a steep increase in broadcasting income: this more than doubled from €28.5m to €62.3m. However, there was also good growth in match day, up €9.0m (37%) from €24.7m to €33.7m, and commercial, up €8.6m (18%...

 ome would argue that the balance at Ajax has tipped too far towards making money, which has had an inevitable impact on performances on the pitch. Despite the poor sporting results, Ajax still achieved an impressive €55m pre-tax profit in 2022/23 (€39m after tax), compared to a €32m loss in the previous season.   The €87m improvement was largely due to significant profit from player sales, which shot up €75m from €38m to €113m. In addition, revenue increased by €7m (4%) from €189m to €196m, while operating expenses fell €6m (3%) to €248m. Ajax’s revenue was hit by lower TV income from European competitions, which led to an €18m (25%) reduction in broadcasting from €74m to €56m, but this was offset by increases in the other two revenue streams. Match day rose €17m (49%) from €34 to €51m, as some matches were played without crowds the previous season because of COVID restrictions, while commercial was up €9m (11%) from €81m to £90m. Ajax’s 2022/23 figures greatly benefi...

The authoritative Swiss Ramble provides a forensic analysis of the latest accounts of Ajax. Ajax swung from €27m pre-tax profit to €12m loss (€8m loss after tax), a €39m decline, largely due to revenue dropping €37m (23%) from €162m to €125m. Profit on player sales rose €2m to €86m, while operating expenses were up €1m. The €12m pre-tax loss is the highest in the Netherlands, though it should be emphasised that these accounts are the first published for the 2020/21 season, so the only ones that include a full year of the pandemic. In 2019/20 no fewer than 11 of the 18 clubs were profitable. The €8m post-tax loss is dwarfed by the massive losses reported by other leading European clubs for the COVID impacted 2020/21 season, including Barcelona €481m, Inter €246m, Juventus €210m. Ajax have a sustainable business model, so their 2021 loss was only the second they have reported since 2010 (the other loss was less than €1m in 2016). In fact, in the last 10 years they have accumulated ...

The authoritative Swiss Ramble has provided financial overviews for leading Dutch clubs. Ajax's pre-tax profit fell €42m from €69m to €27m, mainly due to revenue dropping €37m (19%) from a record €199m to €162m and expenses increasing by €17m, partly offset by profit on player sales rising €12m to €84m. Debt now includes €151m financial leases. PSV's revenue fell €25m (26%) from €97m to €72m, as they competed in the Europa League, rather than the Champions League in the prior season. As a result, their operating loss widened to €41m, but pre-tax profit only fell from €6m to €2m, due to profit from player sales rising €26m to €47m. Feyernood r evenue was up 4% to €73m thanks to reaching Europa League group stage. However, their pre-tax loss slightly worse at €9m, highest in the Eredivisie, as profit from player sales fell from €8m to €4m. Wages up €3m to €38m, but 51% wages to turnover ratio lowest in league. AZ had the second highest pre-tax profit in Netherlands of €8m, despit...

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...

Despite the premature cancellation of the Dutch league and the financial fallout associated with the coronavirus pandemic, AFC Ajax recorded a pre-tax profit of €26.9 million in the 2019/20 season as the club continued to benefit from a highly successful talent monetising strategy.  However, this was considerably below what the club achieved in the previous season. The result was driven by an €84.5 million profit on player sales (€72.6 million the season prior) which weighed up an operating loss that rose from €4.4 million in the 2018/19 season to €55.6 million mainly due to declining turnover. Turnover fell by just below €40 million as Ajax failed to replicate the European venture that brought them to the semi-finals of the Champions League in 2018/19. The club expect the current season's financial result to be negative due to the effects of the coronavirus pandemic.

The wealthiest club in the Netherlands, Ajax, will pay €3m into a solidarity fund to help other clubs.  The three other leading clubs will pay in €500,000 each:  https://www.sportbusiness.com/news/eredivisie-clubs-reach-agreement-on-tv-money-distribution/

Ajax are the most prominent feeder club for teams in the Premier League, La Liga, Serie A, the Bundesliga and Ligue 1, according to a study conducted by the CIES Football Observatory. Benfica are next in line: Stepping stone clubs La Liga was revealed by the CIES Football Observatory to have encouraged youth development the most out of the top five leagues.

Ajax profits were up substantially in the first half of 2019/20: Ajax profits up At one time there was a lot of pessimism about the competitiveness of even historic clubs like Ajax in smaller European countries, but they were boosted by their success in the Champions League last season.

Blogging from the European financial capital of Zurich, the authoritative Swiss Ramble takes a look at the latest Deloitte Money League with Barcelona topping the table this year. Spanish one-two for the second consecutive year, though Barcelona and Real Madrid switched places. No revenue growth at Madrid, but plan to emulate Barca by taking merchandising in-house next year. Atleti £324m and Valencia £163m posted impressive growth, but miles below big two. The combined revenue of the top 20 clubs rose by €939m (11%) to a record €9.3 bn. Main driver of growth was broadcasting, up €575m (16%), though commercial was also significantly up €312m (9%), while match day rose €51m (4%). On track to break €10 bn in next few years. The gap between top and bottom, defined as 1st place to 20th place, increased from €553m to a record €633m. This has been on a steadily upward trend, more than tripling from €207 million in 2006. 'In other words, it’s the usual story of the rich getting richer....

The authoritative Swiss Ramble blogger reviews Ajax's accounts for 2018/19. He notes, 'Their 2018/19 accounts cover their most successful season in years when they won the Dutch league and cup double (for the first time since 2002) and reached the Champions League semi-final with a dazzling brand of football.' Profit before tax shot up from €3m to €69m (€52m after tax), largely due to revenue more than doubling from €93m to a record €199m (thanks to the CL exploits) and profit on player sales rising from €39m to €73m. The price of success was expenses increasing by €74m. The wage bill grew €39m (74%) from €53m to €92m. The club's €106m revenue growth was very largely due to the Champions League run with all three streams increasing: broadcasting surged €76m from €13m to €89m; match day rose €20m (63%) from €31m to €51m; and commercial was €11m (22%) higher at €60m. Few clubs in the Eredivisie make big profits, e.g. in 2017/18 the highest was Feyenoord €16m. Therefor...

Plans to revamp the Champions League have encountered increasing criticism, but Uefa may still press on with them: Battle over Champions League The proposals have been put forward by the European Club Association representing top European clubs. The intention is to make it a more exclusive competition in which top clubs would have a more or less permanent place and intruders like Ajax this year would be kept out. The top 24 clubs in the Champions League would automatically qualify for next year's competition, creating an effective elite cartel. Four places would be given to teams 'promoted' from the Europa League. Just four sides would qualify based on performances in their domestic competitions. It's really an adaptation of an American model of professional sport in which the same franchises stay in place, even if they move city. American owners of European clubs have always found the idea of relegation and promotion odd. For example, if you take baseball, whe...

The authoritative Swiss Ramble looks at the finances of the semi-finalists in the Champions League and Europa League. He notes, 'The Champions League has the “fairest” financial pairings, as it matches the clubs with the highest and 2nd highest revenues, then 3rd and 4th. However, the differences are still huge: Barcelona £612m is £150m more than Liverpool £455m; while Spurs £379m is nearly five times Ajax £81m.' 'It’s a similar story [in the] Champions League with wages. Barcelona’s £431m (excluding other sports such as basketball and handball) is again over £150m higher than Liverpool £264m, while Spurs £148m might be low for a leading Premier League club, but it is triple Ajax £47m.' Based just on the financials, the English teams should reach the Europa League final in Baku, as their revenue is around four times as much as their opponents: Chelsea £448m vs Eintracht Frankfurt £103m; Arsenal £389m vs Valencia £98m. The differences in wages for the Europa League ...

The Swiss Ramble notes, 'After that stunning performance against Juventus, it’s maybe worth remembering how well Ajax have done, given their financial challenges: revenue €92m, wages €53m.' They do, of course, have a very young side with a 19-year old captain. Their 2017/18 accounts cover a season when they finished second in the Eredivisie (for the fourth year in a row), but failed to qualify for the Champions League or Europa League group stages (the first time since 1990/91). Profit before tax decreased from €67m to €2m (profit after tax down from €50m to €1m), largely due to profit on player sales halving from €79m to €39m and revenue dropping €26m (22%) from €118m to €92m following the lack of income from European competition. They are essentially a profitable club, reporting profits in seven of the last eight years (and the only loss in 2015/16 was less than €1m). Over that period, they have accumulated €159m profits, averaging €20m a season. All three Ajax revenue st...

Ajax's triumph over Real Madrid pushed the Dutch club's shares up 11 per cent to a record high. The Eurotext listed club added roughly €27m to its market capitalisation. Ajax is the biggest team Netherlands with revenues of €92m in 2018. However, it does not make it into the top 30 of Europe's richest clubs according to Deloitte. In 2017/18 Ajax's profit before tax decreased from €67m to €2m (profit after tax down from €50m to €1m), largely due to profit on player sales halving from €79m to €39m and revenue dropping €26m (22%) from €118m to €92m following the lack of income from European competition (figures from the authoritative Swiss Ramble). All three Ajax revenue streams decreased: broadcasting fell €18m (58%) from €30m to €12m; match day was down €6m (17%) from €38m to €32m; while commercial was €2m (4%) lower at €48m. Although revenue of around €100m is not too bad, it pales into insignificance compared to elite overseas clubs with Manchester United, Real M...

The authoritative Swiss Ramble takes a look at Ajax's 2017/18 accounts which cover a season when they finished second in the Eredivisie (for the fourth year in a row), but failed to qualify for the Champions League or Europa League group stages (the first time since 1990/91). Profit before tax decreased from €67m to €2m (profit after tax down from €50m to €1m), largely due to profit on player sales halving from €79m to €39m and revenue dropping €26m (22%) from €118m to €92m following the lack of income from European competition. Ajax are essentially a profitable club, reporting profits in seven of the last eight years (and the only loss in 2015/16 was less than €1m). Over that period, they have accumulated €159m profits, averaging €20m a season. All three Ajax revenue streams decreased: broadcasting fell €18m (58%) from €30m to €12m; match day was down €6m (17%) from €38m to €32m; while commercial was €2m (4%) lower at €48m. Revenue decline was partly mitigated by lower costs: w...