There was good news and bad news for European club football in the financial story of the 2012-13 season, as compiled by professional services firm Deloitte in its latest Annual Review of Football Finance.
The good news is that, whether as a consequence of UEFA’s Financial Fair Play (FFP) initiative or for some other reason, top-tier clubs in the five big west European football markets of England, France, Germany, Italy and Spain, do seem to be managing their financial affairs more sustainably.
There is plenty of evidence to support this conclusion.
Revenue growth across the five leagues, as Deloitte put it, “far outstripped” wage-cost growth. To be more specific, while revenues again attained record levels in all five leagues – and this at a time of at best sluggish economic growth in the region – only 25% of cumulative revenue growth was absorbed by wage cost increases.
This, Deloitte calculates, “resulted in static or improved wage:revenue ratios in four of the five leagues, the exception being the Premier League”. In Spain, La Liga’s wage:revenue ratio fell to its lowest level for 13 seasons. In Germany, the wage:revenue ratio in the Bundesliga was a healthy 51%.
Even in Italy, Serie A clubs reduced their combined losses from €160 million to just €53 million and the wage:revenue ratio fell three percentage points to 71%, putting it on a par with the Premier League. The two big Milan clubs were said to have cut their combined wage costs by almost €60 million.
In UEFA President Michel Platini’s home market of France, Ligue 1 clubs came close to break-even for the first time since 2006-07 – and this in spite of a reduced broadcast deal and squeezed matchday and commercial revenues.
That’s the good news. The bad news is that the underlying revenue profile of the leagues is, in Deloitte’s words, “ever more polarised”.
It goes on: “The bigger clubs are growing at a faster pace, contributing a larger proportion of a league’s total revenue, with smaller clubs generally finding it more difficult to achieve any growth at all…
“Other than at the largest clubs, on average, match day and commercial revenues tend to be static or declining, a continuation of the trend of recent years…
“In every league the top six account for between 59% and 74% of total league revenue.”
It perhaps seems strange to be dwelling on this after a season in which Liverpool and more particularly Atlético Madrid have defied expectations so comprehensively, but you don’t have to be Einstein to work out that rich clubs increasingly are likely to monopolise the silverware given such disparities.
Even when comparative small fry manage a season or two in the sun, their stars quickly become coveted by the big boys, as Atlético and Southampton are now finding.
And even though Atlético astonishingly broke the Real-Barça duopoly in Spain, 2013-14 also saw Bayern Munich wrap up the Bundesliga crown by late-March.
Ligue 1, moreover, has moved quickly from having perhaps the most equal competitive balance in Europe (six different champions in six seasons between 2007 and 2013), to a situation of such disparity that it seems almost inconceivable that anyone, bar perhaps Monaco, could mount a worthwhile challenge to Paris Saint-Germain.
PSG, Deloitte found, accounted in 2012-13 for all the league’s revenue growth for the second consecutive year. “Whilst their revenues grew by €178 million, the remaining 19 clubs suffered an aggregate fall of €17 million.” Just as strikingly, while PSG’s wage costs were said to have grown by €103 million to €220 million, “the remaining 19 clubs combined reduced theirs by €82 million (11%)”.
When I consider such statistics year by year, I become more and more convinced that the eventual formation of a European Superleague is all but inevitable.
The habitual messiness of sports politics makes the time-frame for this monumental development, and the trigger-point that might provoke it, impossible to foresee. Might the impetus come from attempts to reform Spain’s particularly unequal model for apportioning broadcasting revenues? Who knows.
But I have little doubt that sooner or later it will happen.
One thing that might stop it is if football fans continue to flock to the product, seemingly indifferent to the levels of predictability in national leagues.
For the moment, the message from stadia seems to be mixed: 2012-13 attendances rose in England, Italy and France while falling in Spain and Germany.
The majority of these people though are committed supporters; ultimately, trends in TV audiences, with more ‘neutrals’ and individuals susceptible to being lured away by alternative programming that may have nothing to do with sport or football, are likely to prove more significant.
Personally, I am not at all convinced that this is a development that should have us quaking in our boots: a European Superleague might be sensational.
But there is one reform that those who oppose it might usefully consider pushing for.
This is for a proportion of the money earned by clubs competing in the Champions League each season – I would suggest half – to be redistributed to others in that club’s league. This would dilute one of the factors behind the polarisation identified by Deloitte.
The cover illustration for this year’s review is a close-up of coffee beans. I would argue that Superleague opponents might be well advised to smell them and take steps to reverse salient current trends before it is too late.
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, the 2010 World Cup and London 2012. Owen’s Twitter feed can be accessed at www.twitter.com/dodo938.