European football is proving more resilient than many businesses in the face of the fiscal and economic shadows hanging over Europe.
But, as the new Deloitte Annual Review of Football Finance* makes clear, not everything is rosy in the rose-garden.
Take Spain, home of arguably Europe’s two leading clubs – Barcelona and Real Madrid.
The report makes plain how financially polarised La Liga, the top Spanish division, has become.
Revenues of the 20 competing clubs totalled €1.72 billion (£1.38 billion/$2.13 billion) in 2010-2011 – a season-on-season increase of 5 per cent.
Good going under the circumstances – until you consider that this growth was entirely down to the top two.
Indeed, their 18 rivals experienced a decline in revenues averaging just over €1 million (£799,500/$1.2 million) each.
In fact, Real and Barça between them generated no less than 54 per cent of La Liga’s total revenues in 2010-2011.
This situation makes for some titanic El Clásico clashes between the Big Two – matches with genuine global appeal.
You could argue that it means that Spain almost always boasts a strong contender for the Champions League.
But it is disastrous for domestic competition.
As Deloitte says: “The €451 million (£361 million/$559 million) generated by Barça in 2010-11…was almost four times that of the third highest revenue-generating club, Valencia at €117 million (£94 million/$145 million).”
Just how, even in a sport as low-scoring as football, could anyone hope to overcome such a disparity, other than very occasionally?
The Big Two generated more matchday revenue (€234 million (£187 million/$290 million) versus €194 million (£155 million/$241 million)) than the other 18 clubs combined.
And they generated €140 million (£112 million/$174 million) more than their rivals in commercial revenues.
While Barcelona secured its first commercial shirt sponsorship deal – worth €30 million (£24 million/$37 million) a season – a number of other clubs have been left without shirt sponsors, in certain cases, says Deloitte, “as a result of the budget constraints on local government, which had been former shirt partners”.
Spanish football does have to hand a means of redressing some of the disparity.
Broadcast rights in the country are sold individually, with the Big Two scooping a giant 48 per cent of the pot.
A collective system, such as that deployed in other countries, could distribute income more evenly.
Notes the report: “Discussions between clubs regarding a collective broadcast revenue distribution model, potentially from 2015-16, with a reduction in the percentage of the total value of deals received by Real and Barça, are continuing.”
Most European leagues are dominated by a handful of clubs; some – Scotland, for example – by just two.
Nonetheless, I do wonder how long a national league can persist in its present format now that the financial imbalance among competing clubs has reached such enormous proportions.
Deloitte notes that six La Liga clubs, including all three of those promoted, started the 2011-2012 season in administration.
If something isn’t done to rebalance the equation, it seems to me only a matter of time before top divisions shrink and/or top clubs in Spain and elsewhere peel away into some sort of European Super League.
The report underlines a worrying trend of a different kind in France: this is simply that its top division, Ligue 1, is losing touch, in commercial terms, with its counterparts in the four other leading West European countries (England, Germany, Italy and Spain).
Ligue 1, says Deloitte, was “the only ‘big five’ league to experience a decline in total revenues in 2010-11…
“France is now closer to being overtaken by the sixth largest league in financial terms, Russia, than it is to catching up with Italy.”
It is no big surprise then that Ligue 1’s brightest young star, Eden Hazard, is off to the Premiership.
Future prospects look challenging too.
While German clubs, for example, can expect a significant increase in broadcast revenues from 2013-2014, the report notes that “new Ligue 1 broadcast deals have been concluded for the four year period 2012-13 to 2015-16, with the value of live rights reportedly reduced slightly.
“Whilst this difference will in part be offset by the increased value of international rights, and the League has committed to assessing the current distribution model, broadcasting revenues are unlikely to deliver substantial revenue uplifts to clubs.”
One French club – Paris Saint-Germain – looks like it may move rapidly up Europe’s wealth league in years to come.
And the country does have another strong card in its hand: its status as host of the 2016 European Championship international football tournament.
It needs to make sure this is used judiciously – as Germany made use of the 2006 World Cup – to help leading French clubs generate increased commercial revenues from remodelled stadium facilities.
If it doesn’t, it may find that Russia, buoyed by its own 2018 World Cup bounce, is snapping at its heels for the number five slot in Europe’s football league hierarchy.
* The Deloitte Annual Review of Football Finance is produced by the Sports Business Group at Deloitte. Email ku.oc1734836983.etti1734836983oled@1734836983kumae1734836983tstro1734836983ps1734836983.
David Owen worked for 20 years for the Financial Times in the United States, Canada, France and the UK. He ended his FT career as sports editor after the 2006 World Cup and is now freelancing, including covering the 2008 Beijing Olympics and 2010 World Cup. Owen’s Twitter feed can be accessed here.