The Political Economy of Football V2

From a financial perspective, 2023/24 was “an exceptionally successful year” for Borussia Dortmund, as pre-tax profit more than quadrupled from €11m to €49m (€44m after tax). Revenue shot up €95m (22%) from €425m to €520m, a new club record and the first time that Dortmund have broken through the €500m barrier. This was further boosted by profit from player sales also increasing by €25m (35%) from €73m to €98m. This was partially offset by significant growth in operating expenses, which rose €92m (19%) to €572m. However, interest swung from €6m payable to €3m receivable. Broadcasting was the star of the show, rising €49m (31%) from €157m to €206m, though commercial also significantly increased by €33m (15%) from €217m to €250m. Match operations was up €9m (21%) from €44m to €53m. Unlike many other leading leagues, German clubs very largely operate sustainably with no fewer than 13 of the 18 Bundesliga clubs posting a profit. The losses at four of the other five clubs were less ...

The Champions League continues to be a fantastic money-spinner for the elite clubs, even before the 21% increase in revenue next season when the new “Swiss model” will be implemented, so the gap with the “also rans” looks likely to further grow. Five clubs have earned more than €100m from this season’s Champions League, namely Real Madrid €133m, Paris Saint-Germain €121m, Borussia Dortmund €120m, Bayern Munich €119m and Manchester City €109m. They are closely followed by three clubs “in the nineties”: Barcelona €97m, Arsenal €93m and Atletico Madrid €92m. As would be expected, the two Champions League finalists have earned the most prize money: Real Madrid €66.5m and Borussia Dortmund €59.2m. The Spaniards have received more than the Germans, due to a far better record in the group stage, where they won all six games. They were followed by semi-finalists Bayern Munich €48.9m and Paris Saint-Germain €40.6m, then the quarter-finalists: Manchester City €38.5m, Atletico Madrid €34.2m...

Borussia Dortmund posted an €11m pre-tax profit in 2022/24 (€10m after tax), which represented a €41m improvement on the previous season’s €30m loss. Revenue rose €48m (13%) from €377m to €425m, a new club record, boosted by profit from player sales increasing €10m (15%) from €63m to €73m. This was partially offset by €15m (3%) growth in operating expenses, while net interest payable was up €2m to €6m. There was good growth across all three of the main revenue streams, though commercial was the star of the show, rising €33m (18%) from €184m to €217m, a new high for the club. Match operations nearly doubled from €23m to €44m, as COVID restrictions were lifted, while broadcasting increased €12m (9%) to €158m. After nine consecutive years of profits, which generated €227m between 2011 and 2019, Dortmund were hit hard by COVID, which led to three consecutive losses, adding up to €150m that “put our business model to the test”. However, it was business as usual in 2022/23 as the clu...

Following Bayern Munich’s shock defeat to Mainz last weekend, they have been overtaken by Borussia Dortmund, who now lead the Bundesliga. Although second place would be regarded as a fine achievement by most clubs, this is certainly not the case for Bayern, who are seemingly in crisis mode. For some context, Bayern have won the Bundesliga for the last 10 years in a row, so anything other than victory would be regarded as a failure.    Part of the reason for Bayern’s imperious record over the last decade is their financial power. In 2021/22 Bayern reported a €17m pre-tax profit in contrast to Dortmund’s €33m loss, mainly because their revenue is significantly higher than their rivals, partially offset by Dortmund’s better profit from player sales. Bayern’s cost base is also much higher. In fact, Bayern have now been profitable for an amazing 30 years in a row, including €361m in the last decade alone. Profits have been lower in the last three seasons, due to COVID restric...

The latest club accounts to be subjected to forensic security by the Swiss Ramble from Zurich are those of Borussia Dortmund. The club’s pre-tax loss widened from €47m to €73m, as revenue dropped €35m (9%) from €379m to €345m and profit on player sales fell €25m from €40m to €15m, partly offset by cutting operating expenses by €31m and net interest payable decreasing €2m. The €73m pre-tax loss is the highest in Germany, 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 eight of the 18 clubs lost more than €20m. After nine consecutive years of profits, which generated €227m between 2011 and 2019, BVB have now posted losses in each of the last two years, amounting to €120m. The board expects another net loss in 2021/22, albeit much lower (between €12m and €17m) The €35m revenue fall was due to COVID driven reductions in match operations, down €32m (98%) to €1m, and...

Borussia Dortmund have reported losses of €72m, up from €44m the previous year.   This is one of the biggest losses attributed to Covid-19, although player trading was also a factor:  http://www.insideworldfootball.com/2021/08/10/no-fans-westfalenstadion-pushes-dortmund-e72m-loss/  

Controversial RB Leipzig and Borussia Dortmund meet in the Bundesliga this week.   Energy drink company Red Bull is the sole investor in the Leipzig club and has not been constrained by the 50+1 rule.  They have been described as 'the most hated football team in the Bundesliga':  https://www.espn.co.uk/football/german-bundesliga/story/4029702/why-rb-leipzig-is-the-most-hated-soccer-team-in-the-bundesliga RB Leipzig have managed to cement themselves in the top of the Bundesliga despite a relatively small wage budget, with spending of €119.1 million compared to Dortmund's €205.1 million in the 2018/19 season. A €46.6 million pre-tax loss last season put a damper on Dortmund's otherwise sustainable business model with profits of more than €100 million for the prior four seasons compared to RB Leipzig's €18.2 million. Agent spending is seen as key to attract more sought-after players with Dortmund spending €44.5 million on intermediaries in 18/19 where RB Leipzig spent ...

Borussia Dortmund in August reported a financial loss of €44 million – the club's first deficit in 12 years. However, the club have now revealed that the pandemic nightmare is far from over.  In a recently released 224 pages financial report, Dortmund's management writes that Covid-19 is also expected to have a huge impact on the club's finances in 2020/21. Dortmund with managing director Hans-Joachim Watzke in the lead expect to lose between €70 million and €75 million in the 2020/21 financial year. The club state that there is a high degree of uncertainty and that "Covid-19 will affect almost all revenue streams". In 2019/20, Dortmund had a turnover of €442.1 million including transfer revenue. That figure is predicted to drop by about 20 per cent "mainly due to a decline in revenue from transfer business." The just finished transfer window was very unusual for Dortmund as they only had transfer income of about €5 million. However, if Jadon Sancho is s...

The authoritative Swiss Ramble reviews the 2019/20 accounts of Borussia Dortmund.   They  went from €22m profit before tax to €47m loss (€44m after tax), mainly due to profit on player sales falling €43m to €40m. Despite the COVID restrictions, revenue was basically flat at €379m, but operating expenses rose €25m and net interest payable was €2m higher. The €47m loss was their first since 2010. In the nine years up to 2019, they generated €227m profits, averaging €25m a season. In light of the high degree of uncertainty related to all revenue streams, the board expects a net loss in 2021 between €70m and €75m. The only revenue item to decrease was match operations, down €12m (27%) to €33m, but the pandemic restricted growth in broadcasting, up €3m (1%) to €170m, commercial, up €10m (6%) to €168m, and other operating income, up €1m to €9m. In 2018/19, i.e. before the pandemic, the €22m pre-tax profit was fifth highest in the Bundesliga, only surpassed by Bayern Munich €75m...

The authoritative Swiss Ramble reviews the 2018/19 accounts of Borussia Dortmund. Profit before tax decreased €13m from €35m to €22m (profit after tax €17m), despite revenue rising €60m (19%) from €317m to €377m, as profit on player sales fell €49m from €126m to €77m and total expenses were up €26m, but net interest payable was €3m lower. Although they have reported solid profits, they are a long way below the leading English clubs. All revenue streams increased, though the largest growth by far was in broadcasting, up €45m (37%) to €167m. In addition, commercial rose €9m (6%) to €157m, match operations €2m (6%) to €45m and other operating income €4m to €8m. The club has been consistently profitable with 2010 being the last time the club reported a (small) loss. In the 9 years since then, they have accumulated €227m profits, averaging €25m a season. The board expects to post another profit in 2019/20. They have become increasingly reliant on player sales with average annual profit...