By Paul Nicholson
January 16 – Almost half of Europe’s champion clubs rely on UEFA competitions for 25% or more of their revenue, but it comes at a cost. For Real Madrid that was a 32% increase in staff costs to €406 million, the highest wage bill in world football and accounting for 61% of the club’s revenues.
In contrast German champions Bayern Munich had the lowest payroll-to-revenue ratio (45%) of the 12 national league champions analysed in the second edition of KPMG’s Football Benchmark report. AS Monaco, at 69%, had the highest payroll-to-revenue ratio.
The Football Benchmark report analyses the 2016/17 season’s most relevant business performance indicators of the domestic champions from 12 European leagues – AS Monaco, Beşiktaş JK, Celtic, Chelsea, Basel 1893, Bayern München, Spartak Moscow, FC Viitorul Constanţa, Feyenoord, Juventus, Real Madrid and Benfica.
All the clubs in the analysis reported a financial year which the authors say “highlights the shift of the football industry towards sustainability.” Even so it is a sustainability that has some major difference in commercial metrics, and for some a major reliance (and perhaps dangerously over-reliance) on European success and the UEFA payments that brings, with perhaps Monaco being the biggest example.
The French champions were the unexpected winners of Ligue 1 in 2016/17, in a season that also saw them reach the semi-finals of the Champions League. Their on-pitch results catapulted them into a bigger revenue league, earning €44 million (an 86% year-on-year increase) but still only a quarter of Paris Saint-Germain’s revenues and, as the report authors point out, “also lower than the €198 million enjoyed by Olympique Lyon.”
The €68 million they received from UEFA being the key driver of the revenue increase – the club played in front of an average home crowd of just 9,466 in a stadium which has a capacity of 16,500.
Monaco’s success came on the back of a 20% increase in staff costs to €98.8 million, but the UEFA money drove the staff costs/revenue ratio down from an unsustainable 107% to a more sustainable 69%.
Andrea Sartori, KPMG’s Global Head of Sports and the report’s author, said: “One of the main challenges affecting football clubs in recent years has concerned the sustainability of their business. Notwithstanding this, all European champions included in the report scored an after-tax profit; indeed, despite eye-catching transfer deals and spiralling staff costs, the industry is headed towards a direction where being profitable is not a chimera anymore.
“Moreover, in this scenario, clubs excelling at player development and trading are likely to have a competitive edge, three prime examples in this regard being Chlesea FC, Juventus FC and SL Benfica thanks to the transfers of Oscar, Pogba, Gonçalo Guedes and Lindelof, respectively. Indeed, as a result the Eagles doubled last year’s profit after-tax (EUR 44.5 million), whilst Juventus FC increased profits by almost EUR 40 million in comparison to the previous year.”
See the full report at www.footballbenchmark.com
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