The European Champions Report 2019 1

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The European Champions Report 2019

January, 2019 KPMG Sports Advisory Practice footballbenchmark.com

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he 2017/18 season has In particular, Galatasaray SK showed been characterised by fierce the highest year-on-year operating competition of teams to retain revenue increase, of 19% (50% in local Foreword T 1 their spots at the top of rankings in currency ). FC Barcelona, with total Europe. Only FC Bayern München and operating revenues of EUR 689 million, Juventus FC managed to confirm their are the richest club among the eight leadership in Bundesliga and Serie A, champions reviewed in our study, winning their sixth and seventh titles and the second one overall behind Real in a row, respectively, while the other Madrid CF, whose operating revenues six leagues surveyed have seen a new reached EUR 743 million at the end of champion emerge. the 2017/18 season.

FC Barcelona, Paris Saint-Germain FC The positive revenue trend can and PSV Eindhoven are back in our be mainly attributed to the rise of report after just one year of absence. Commercial revenues. This income The Blaugrana won La Liga for the 25th item grew for all eight clubs, with time in their history, a fair “consolation FC Bayern München confirming their Andrea Sartori prize” after seeing historical rivals Real primacy in this area, reaching EUR Partner Madrid CF winning their third UEFA 316 million2. Commercial represents KPMG Global Head of Sports Champions League in a row, while Paris the source of revenue with the highest [email protected] Saint-Germain FC dominated the Ligue impact on total turnover for six of the 1, after the unexpected triumph of AS eight European champions, with Monaco FC in the previous season. FC Porto and Juventus FC being the only The Dutch Eredivisie proclaimed the two exceptions. Interestingly though, city of Eindhoven as the Netherlands’ these two clubs are the best performers football capital for the 24th time in its in terms of year-on-year Commercial history. Finally, three clubs regained income’s growth, with an increase of championship after several years, and 43% and 21%, respectively. thus made their first-ever appearance in our report: FC Porto, Galatasaray SK and The analysis undertaken in this Manchester City FC. The Cityzens broke study, despite some differences records in the English Premier League, among the various clubs, highlights finishing 19 points ahead of city rivals the prominence that commercial Manchester United FC, and building a expansion is gaining: while Matchday team that now has a hunger to succeed income is capped by stadium capacity also on the European stage. and Broadcasting is limited by multi-year deals, effective In the third edition of “The European management decisions and strategies, Champions Report”, KPMG’s Football supported by adequate sporting Benchmark team pays tribute to performance, can exploit yearly the champions of Europe’s most commercial opportunities. prominent leagues in the 2017/18 season, reviewing and comparing As revenues increased, so did personnel some of their most relevant business costs. The historic transfer of Brazilian performance indicators to provide striker Neymar from FC Barcelona to perspective on these clubs’ future. Paris Saint-Germain FC for EUR 222 We exclusively focus on the domestic million, and the “domino effect” that league champions from eight of the it caused with the Blaugrana acquiring main leagues: FC Barcelona, FC Bayern Dembélé and Coutinho as substitutes, München, FC Porto, Galatasaray SK, were some of the main contributors to Juventus FC, Manchester City FC, Paris Staff cost increases for these two clubs. Saint-Germain FC and PSV Eindhoven. Indeed, FC Barcelona registered the most remarkable year-on-year increase For the third year in a row, football (+42%), recording more than half a continues to demonstrate its brawn billion euros for the first time in the as a growing industry, with operating history of football (EUR 562 million), revenues (net of transfer proceeds) while PSG reached EUR 332 million increasing for six of the eight clubs (an increase of +20%). Cost control examined herein, Juventus FC and PSV remains a key issue for football clubs, as Eindhoven are the exceptions. the increase in the staff costs/operating

1In order to conduct cross-league analysis and comparison, where the local currency is not EUR, for the purposes of this report all local currency figures have been converted using the average exchange rate for the 12 months prior to 30 June 2018.

2All data refer to the individual financial statements of FC Bayern München AG. Consolidated data were not available at the date of publication.

revenue ratio for all the European In this year’s report, we provide transforming football organisations into champions, with only the exception of information on the eight European real global brands, capable of attracting Manchester City FC, demonstrates. champions’ squads’ market value, not only fans, but actual customers, and In this scenario, three clubs have based on KPMG’s proprietary Player thus capturing audiences from all over exceeded the 70% threshold, a Valuation Tool, which estimates the the world. parameter monitored by UEFA (FC market value of players as at 1 January Barcelona 81%, FC Porto 80% and 2019. Manchester City FC possess We hope that you enjoy this year’s report Galatasaray SK 71%). Despite this the most valuable team (EUR 1,182 and encourage you to explore general costs increase, five clubs out of million), while at the players’ level, www.footballbenchmark.com, KPMG’s the eight obtained a positive after-tax Neymar is the most valuable footballer football business intelligence tool and result in the 2017/18 season, with the (EUR 229 million), followed by Kylian the primary source of financial data in the three clubs registering a loss being FC Mbappé (EUR 215 million) and Lionel football industry. Porto, Galatasaray SK and Juventus FC. Messi (EUR 203 million).

Football players represent the core asset Football is undergoing an important for football clubs and their transfers phase of change from a business point continuously grab the headlines, as clubs of view, with top clubs moving towards fight to secure the top talent available. an entertainment company model,

Highlights

Key performance indicators

Operating revenues Total Staff costs Proﬁt/Loss after tax Stadium utilisation rate Squad market value Social media followers* 2017/18 season 2017/18 season 2017/18 season 2017/18 season as at 1st January 2019 as at 1st January 2019 in EUR million in EUR million in EUR million in EUR million in million

FC Barcelona FC Bayern München** 689 562 596 303 +13 66% +22 100% 1,101 225 764 72

FC Porto Galatasaray SK 106 85 114 81 -29 85% -49 79% 232 6 83 27

Juventus FC Manchester City FC 402 259 568 293 -19 94% +12 98% 792 67 1,182 59

Paris Saint- PSV Eindhoven Germain FC 62 35 542 332 % +32 98% +0.2 95 896 64 160 2

*Note: Facebook, Instagram , Twitter and YouTube combined. **Note: All data refer to the individual financial statements of FC Bayern München AG. Consolidated data were not available at the date of publication.

Source: KPMG Football Benchmark

Revenues overview (2017/18 season) Total (in EUR million) and breakdown (in %) Matchday Broadcasting Commercial & Other

% % 11 % 24% 17 18

44% 689 53% 596* 47% 568 58% 542 % 30% 42% 24 32%

% % 14 12 % 25% 19 36% 43% 36% 402 114 106 62 17% 64% % % 50 32% 52

*Note: All data refer to the individual financial statements of FC Bayern München AG. Consolidated data were not available at the date of publication.

Source: KPMG Football Benchmark

Revenues trend year-on-year in %

+19 20 15 +12 10 +7 +7 +8 5 +3 0 -2 -5

-10 -15 -20 -25 -28 -30

Source: KPMG Football Benchmark

Dream Team of the Most Valuable Players among the 8 European champions Market value in EUR million as at 1st January 2019

Jordi Alba (FC Barcelona) 50

Philippe Coutinho Neymar (FC Barcelona) (Paris Saint-Germain FC) 118 229

Samuel Umtiti (FC Barcelona) 72

Marc-André ter Stegen Miralem Pjanic Lionel Messi (FC Barcelona) (Juventus FC) (FC Barcelona) 89 69 203

John Stones (Manchester City FC) 65

Kevin De Bruyne Kylian Mbappé (Manchester City FC) (Paris Saint-Germain FC) 129 215

Joshua Kimmich (FC Bayern München) 67

Source: KPMG Football Benchmark

Key performance indicators: most remarkable year-on-year changes by club

FC Barcelona FC Bayern München FC Porto Galatasaray SK

Staff costs Broadcasting revenues Commercial revenues Average attendance +42% +20% +43% +118%

Juventus FC Manchester City FC Paris Saint-Germain FC PSV Eindhoven

Proﬁt after tax Enterprise Value Staff costs Broadcasting revenues -62 +181 +20% -68% EUR million EUR million

Source: KPMG Football Benchmark

Key performance indicators

Financial and operational figures (2017/18) in EUR million FC Barcelona Source: KPMG Football Benchmark - Club finance & operations

Matchday 164.0 YoY Operating revenues growth % Broadcasting 220.1 7 Commercial & other 305.0

La Liga Total operating revenues 689.1

Staff costs / Operating revenues Total staff costs 561.6 81%

Pre-tax profit/loss 20.1

Profit/loss after tax 12.9

Domestic league average attendance 65,824 Utilisation rate % Camp Nou capacity 99,354 66

Squad market value in EUR million as at 1st Jan, 2019 Source: KPMG Football Benchmark - Player Valuation 1,101

Top 3 most valuable players:

Lionel Messi (Argentina) 203

Philippe Coutinho (Brazil) 118

Marc-André ter Stegen (Germany) 89

Total social media followers in million as at 1st Jan, 2019 Source: KPMG Football Benchmark - Social Media Analytics 225

Enterprise Value in EUR million as at 1st Jan, 2018 2,783 Source: KPMG Football Clubs’ Valuation: The European Elite 2018 (3rd place)

fter taking their place behind sales (+EUR 9.1 million) and friendlies others, Lionel Messi, new signings made historical rivals Real Madrid CF (+13.8 million). By contrast, Camp Nou’s over the transfer windows, and bonuses A in 2016/17, the 2017/18 season utilization rate decreased from 78% paid on such contracts. saw FC Barcelona topping the league to 66%, showing how difficult it is for a again, securing their 25th Spanish title. club of the magnitude of the Catalans Despite significant increases in Staff The Blaugrana’s trophy room has also to constantly sell out the 99,000-seater costs, the club managed to maintain a been enriched by the Copa del Rey, won stadium. It remains to be seen how the positive bottom-line result of EUR 12.9 in the final against Sevilla FC, and the announced future investments in the million, mainly a consequence of the Spanish Super Cup. However, after the club’s stadium, with planned expansion extraordinary profits on the disposal historical remuntada at the expense of of up to 105,000 spectators, will affect of players’ registrations totalling EUR Paris Saint-Germain FC in the previous Camp Nou attendance. The main source 209 million. This value was derived UEFA Champions League campaign, it of revenue remained Commercial (EUR principally from the much-debated was FC Barcelona’s turn to suffer a great 305 million) and Broadcasting (EUR transfer of Brazilian superstar Neymar comeback by AS Roma, resulting in the 220.1 million), accounting for 44% and for the record amount of EUR 222 million former’s elimination at the quarter-finals 32%, respectively, of total operating to Paris Saint-Germain FC. At the same for the third year in a row. revenue. Meanwhile, Commercial time, the overall player trading result was revenues have grown by 6%, mainly partially curtailed by the new investments Financially, FC Barcelona earned thanks to a new deal with main shirt made to replace the Brazilian forward, operating revenues of EUR 689.1 sponsor Rakuten (for EUR 55 million/ with special reference to the acquisitions million, a 7% year-on-year increase that year), a Japanese e-commerce and of Ousmane Dembélé and Philippe allowed Barça to surpass Manchester internet company. Coutinho, which almost doubled the United FC (EUR 665.8 million) and move amortisation of the squad. into second place after Real Madrid CF Moving to the cost side, the Blaugrana (EUR 742.5 million) in terms of operating exhibit the highest Staff costs of the In the first part of the 2018/19 season, revenue ranking in world football. eight clubs with EUR 561.6 (+42% FC Barcelona are confirming their On the other hand, FC Barcelona are year-on-year, +119% in the past seven leadership of La Liga and have easily won undoubtedly the leading club for seasons) and a staff cost/operating their UEFA Champions League group. turnover among the 2017/18 European revenue ratio of 81% (+19% year-on-year) In the near future, a crucial aspect will champions, overcoming second-placed among the clubs included in our report. be the development of the new stadium, FC Bayern München by 16%. This figure not only represents a record which for the first time in the club’s for the football industry, but for sport history could include naming rights, a The turnover increase is mainly due in general, making FC Barcelona the project that will likely generate significant to better Matchday results (EUR 164 biggest spender in Staff costs among additional revenue. million, +15% year-on-year), thanks to any sports team. The main reasons for improved performance in season ticket this are the contract renewal of, among

Staff costs and Staff costs/Operating revenue ratio evolution (2011/12 - 2017/18)

600 90%

% 81 80% 500 % % 70 66 % 64 % 62 % 400 % 60 % 57 53% 55 50% 300 562 40% EUR million 200 369 397 395 30% 257 264 274 20% 100 10%

0 0% 2011/122012/13 2013/142014/152015/162016/172017/18 Staff costs Staff costs/Operating revenue ratio

Source: KPMG Football Benchmark

Key performance indicators

Financial and operational figures* (2017/18) in EUR million FC Bayern Source: KPMG Football Benchmark - Club finance & operations

Matchday 103.8 YoY Operating revenues growth München % Broadcasting 176.7 8 Commercial & other 315.6

Total operating revenues 596.1

Staff costs / Bundesliga Operating revenues Total staff costs 302.5 51%

Pre-tax profit/loss 34.8

Profit/loss after tax 22.0

Domestic league average attendance 75,000 Utilisation rate % Allianz Arena capacity 75,000 100

Squad market value in EUR million as at 1st Jan, 2019 Source: KPMG Football Benchmark - Player Valuation 764

Top 3 most valuable players:

Robert Lewandowski (Poland) 87

James Rodríguez (Colombia) 68

Joshua Kimmich (Germany) 67

Total social media followers in million as at 1st Jan, 2019 Source: KPMG Football Benchmark - Social Media Analytics 72

Enterprise Value in EUR million as at 1st Jan, 2018 2,552 Source: KPMG Football Clubs’ Valuation: The European Elite 2018 (4th place)

*All data refer to the individual financial statements of FC Bayern München AG. Consolidated data were not available at the date of publication. © 2019 KPMG Advisory Ltd., a Hungarian limited liability company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The European Champions Report 2019 11

he 2017/18 Bundesliga campaign representing a remarkable 85% increase In order to maintain their did not start in the most optimal on the previous cycle. This new deal, competitiveness, the club continued to way for FC Bayern München, which runs until the 2020/21 season, invest in the squad, bringing Colombian T rd with Italian manager Carlo Ancelotti represents the 3 most lucrative playmaker James Rodríguez from replaced by Jupp Heynckes at the end domestic broadcasting deal in Europe, Real Madrid CF on a two-year loan, of September. Despite the difficult after the English Premier League and and midfielder Corentin Tolisso from start, Bayern’s dominance on the the Spanish La Liga. As in previous Olympique Lyonnais, among others, German landscape has been confirmed: years, revenues were mainly driven by to München. These investments have the Bavarian club won their 28th Commercial income, which increased increasingly widened the gap with other Meisterschale, with 21 points ahead of up to EUR 315.6 million, the highest German clubs: the current market value the second-placed FC Schalke 04. value registered among the 2017/18 of the squad is EUR 764 million, EUR European champions. Precisely, 265 million more than that of Borussia The 6th title in a row, and the UEFA Commercial income accounts for 53% Dortmund, the second most valuable Champions League journey up to the of the total revenues, making FC Bayern squad in Germany. semi-finals, took operating revenues München one of the clubs that best to a new record of EUR 596.1 million1 exploit Sponsorship and Merchandising Despite such clear dominance on the net of transfer proceeds (EUR 629.2 revenue streams. Matchday revenues domestic stage in the past few seasons, million at group level), an 8% (EUR 103.8 million) increased by 6% the first part of the 2018/19 season has year-on-year increase. Thanks to these year-on-year, confirming the exceptional seen a leadership change at Bundesliga, figures, FC Bayern München found statistics of Allianz Arena, which with Borussia Dortmund graduating themselves in second position in terms registered a sell-out for the 3rd season as winter champions and FC Bayern of operating revenues among the eight in a row. München currently trailing behind. clubs analysed in this report, behind only The UEFA Champions League path was FC Barcelona (EUR 689.1 million). In this season, FC Bayern München easier, with a comfortable qualification demonstrated their great efforts to to the Round of 16, where the club will The revenue stream showing the operate sustainably and to distribute face a tough opponent like Liverpool FC. highest year-on-year increase is dividends to their shareholders. Failure to win the league might negatively Broadcasting (EUR 176.7 million, For this reason, it should come as no affect the club’s economic results for +20%), benefitting from the new surprise that, at 51%, they are the club the next financial year; in this sense, Bundesliga domestic broadcasting with the lowest staff costs/operating international success will be even more agreement which kicked-off in the revenue ratio among the eight crucial to compensate for this decrease 2017/18 season, worth approximately European champions covered in and to continue the Commercial EUR 1.2 billion per year and this report. development of the club.

1All data refer to the individual financial statements of FC Bayern München AG. Consolidated data were not available at the date of publication.

Credits: FC Bayern München

Key performance indicators

Financial and operational figures (2017/18) in EUR million FC Porto Source: KPMG Football Benchmark - Club finance & operations

Matchday 13.1 YoY Operating revenues growth % Broadcasting 54.6 7 Commercial & other 38.1

Primeira Liga Total operating revenues 105.8

Staff costs / Operating revenues Total staff costs 84.8 80%

Pre-tax profit/loss -28.0

Profit/loss after tax -29.0

Domestic league average attendance 42,632 Utilisation rate % Estádio Do Dragão capacity 50,033 85

Squad market value in EUR million as at 1st Jan, 2019 Source: KPMG Football Benchmark - Player Valuation 232

Top 3 most valuable players:

Alex Telles (Brazil) 25

Moussa Marega (Mali) 24

Yacine Brahimi (Algeria) 22

Total social media followers in million as at 1st Jan, 2019 Source: KPMG Football Benchmark - Social Media Analytics 6

Enterprise Value in EUR million as at 1st Jan, 2018 Source: KPMG Football Clubs’ Valuation: The European Elite 2018 N/A

n the 2017/18 season, FC Porto rights deal in the history of Portuguese Ricardo Pereira to Manchester United managed to interrupt SL Benfica’s sports, with a total value of FC and Leicester City FC, for EUR 22 I dominance in the Portuguese Primeira approximately EUR 458 million, and it million and EUR 20 million, respectively, Liga, as the latter had been winners in also includes the right to use advertising represent the perfect example of the the previous four seasons. The Dragões space at Estádio do Dragão. On the club’s business model, which is based won their 28th Portuguese title, ending European stage, participation to the on nurturing and acquiring young players their league 7 points ahead of their top flight competition remains vital, as who can be sold at a premium. historical rivals from Lisbon, and also FC Porto have registered the highest Despite the positive results in player lifted the Supertaça Cândido de Oliveira UEFA dependence ratio among the trading, the club registered a loss (Portuguese Super Cup) following their eight clubs covered in this report: after tax of EUR 29 million, a slight contest with Clube Desportivo das UEFA Champions League prize money improvement compared to the Aves. Moreover, FC Porto participated (EUR 30.9 million) accounts for 29% of 2016/17 loss of EUR 35.2 million. in the UEFA Champions League for the total turnover. Due to failure to comply with the 7th consecutive season, finishing at the break-even requirement as per UEFA Round of 16, where they were eliminated Commercial revenues showed the Financial Fair Play Regulations, FC Porto by eventual finalists Liverpool FC. highest year-on-year growth, equivalent agreed upon a settlement agreement to an increase of +43%. Such growth with UEFA in 2017; at the end of the FC Porto’s operating revenues is the result, as pointed out by their 2017/18 season the club have met reached EUR 105.8 million (a 7% administrators, of the reclassification the targets set, and will remain in the year-on-year increase), the second of “corporate hospitality” receipts settlement regime until 2020/21. highest figure in the Portuguese (EUR 9.5 million) from Matchday to the landscape after SL Benfica (EUR 121.5 Commercial area, and of an increase in During the first half of the current million). Main sources of revenue for Merchandising income (+ 22%, EUR season, the Dragões managed to retain the club were Broadcasting (EUR 54.6 6.3 million). the lead of Primeira Liga, while in the million) and Commercial (EUR 38.1 UEFA Champions League they won million), accounting for 52% and 36% of In parallel, finishing first in the league their group, qualifying for the total turnover, respectively. Broadcasting contributed to an 8% year-on-year knock-out phase, where they will face AS revenues from domestic competitions, increase in Staff costs (EUR 84.8 million); Roma. As pointed out by administrators, which in the Primeira Liga are sold on a this figure makes FC Porto’s staff costs/ the aforementioned new domestic club-by-club basis rather than collectively, operating revenue ratio of 80% the broadcasting deal and the new, more remained flat. This scenario will change second highest (after FC Barcelona) remunerative UEFA distributions’ cycle starting from the current campaign, as among the eight clubs analysed in our which kicked-off at the beginning of the FC Porto penned a new agreement study. ongoing season, provide hope that the with Altice-affiliated Portugal Telecom club will be in shape to reverse its current coming into effect from 2018/19 for 10 The club continued to profit from player economic standing. years. This new deal, signed in 2015, trading to partially balance the books, represents the largest TV broadcasting and the disposals of Diogo Dalot and

Credits: FC Porto

Key performance indicators

Financial and operational figures (2017/18) in EUR million Galatasaray SK Source: KPMG Football Benchmark - Club finance & operations

Matchday 28.1 YoY Operating revenues growth % Broadcasting 36.8 19 Commercial & other 49.2

Süper Lig Total operating revenues 114.1

Staff costs / Operating revenues Total staff costs 80.9 71%

Pre-tax profit/loss -50.4

Profit/loss after tax -49.5

Domestic league average attendance 41,050 Utilisation rate % Türk Telekom Arena capacity 52,223 79

Squad market value in EUR million as at 1st Jan, 2019 Source: KPMG Football Benchmark - Player Valuation 83

Top 3 most valuable players:

Badou Ndiaye (Senegal) 12

Henry Onyekuru (Nigeria) 9

Emre Akbaba (Turkey) 7

Total social media followers in million as at 1st Jan, 2019 Source: KPMG Football Benchmark - Social Media Analytics 27

Enterprise Value in EUR million as at 1st Jan, 2018 330 Source: KPMG Football Clubs’ Valuation: The European Elite 2018 (25th place)

fter two years of dominance by compliance with Financial Fair Play comparison to the previous financial city rivals Beşiktaş JK, in 2017/18 Regulations and agreed to conclude year, attributable to various factors. A Galatasaray SK have been able another settlement agreement, showing On one hand, player trading activities to re-establish their domestic primacy, how the international body decided facilitated profits on disposal of players lifting their 21st Turkish Süper Lig trophy. to implement a softer sanction this that were five times higher than those for Better on-pitch performance and the time. The club will be monitored until the previous season (EUR 23 million). commencing of a new, USD 600 million the 2021/22 football season, when On the other hand, the financial a year domestic TV deal at league level, break-even will have to be undertaken, operations of the club (- EUR 25 million) were the main drivers for a 19% reporting a maximum loss of EUR 20 played a substantial role in weighing year-on-year increase in operating million in 2018/19 and EUR 10 million in down the bottom-line, especially due turnover (EUR 114.1 million). 2019/20. In addition to that, among other to foreign exchange losses and bank Such an increase amounts to 50% in sanctions imposed, Galatasaray SK will interest payments, partially offset by local currency, a significant difference have to pay a fine of EUR 15 million (EUR financial income from related parties. attributable to the weakening of the 9 million are conditional and depending Turkish Lira1. on the club’s compliance). UEFA’s settlement agreement requires Galatasaray SK to register, The 2017/18 season saw the club Improved on-pitch results drove a 63% as mentioned above, a maximum loss coming back to the international stage, year-on-year increase in Matchday of EUR 20 million in 2019, meaning although suffering an early elimination revenues, something also bolstered the Turkish side would have to at least in the UEFA Europa League preliminary by a remarkable boost in average halve the current deficit. The 2018/19 rounds by Swedish side Östersunds FK. attendance, which more than doubled season has seen the club make their For the previous, 2016/17 campaign compared to the previous season. mark on the international scene again, the club was banned from UEFA In the commercial stream, Merchandising taking part in the UEFA Champions competitions due to failure to comply income (+23%) showed the greatest League group stage. Despite ending up with the terms of a Financial Fair Play increase. The club maintained significant 3rd in the table, and being consequently settlement agreement that they had efforts to hoist themselves back up demoted to UEFA Europa League for entered into with UEFA in May 2014. atop the league, as demonstrated by the second half of the season, the In its referral decision in March 2016, the 20% Staff costs increase; however, club will likely take advantage of UEFA the Club Financial Control Body Chief considering turnover has grown at the distributions at the end of the year, Investigator stated that one of the main same rate, staff costs/operating revenue resources that might prove key in reasons for this was the club’s inability ratio remained stable at 71%. complying with the Financial Fair Play to control expenses, as both transfer Regulations. and personnel expenses had increased. Galatasaray SK reported a net loss In October 2018, UEFA announced of EUR 49.5 million in 2017/18, that Galatasaray SK were still not in representing a 39% improvement in

1Exchange rate in 2016/17: 1 EUR = 3.68 TRY; exchange rate in 2017/18: 1 EUR = 4.63 TRY.

Loss after tax evolution (2011/12 - 2017/18) in EUR million 2011/122012/132013/142014/152015/162016/172017/18 0

-10 -15 -31 -25 -20 -40 -43 -49 -30

-40 -81

-50

-60

-70

-80

-90 -284

Loss after tax Cumulative loss after tax Source: KPMG Football Benchmark

Key performance indicators

Financial and operational figures (2017/18) in EUR million Juventus FC Source: KPMG Football Benchmark - Club finance & operations

Matchday 57.2 YoY Operating revenues growth % Broadcasting 200.2 -2 Commercial & other 144.9

Serie A Total operating revenues 402.3

Staff costs / Operating revenues Total staff costs 259.0 64%

Pre-tax profit/loss -10.0

Profit/loss after tax -19.2

Domestic league average attendance 38,948 Utilisation rate % Allianz Stadium capacity 41,500 94

Squad market value in EUR million as at 1st Jan, 2019 Source: KPMG Football Benchmark - Player Valuation 792

Top 3 most valuable players:

Cristiano Ronaldo (Portugal) 107

Paulo Dybala (Argentina) 95

Miralem Pjanic (Bosnia and Herzegovina) 69

Total social media followers in million as at 1st Jan, 2019 Source: KPMG Football Benchmark - Social Media Analytics 67

Enterprise Value in EUR million as at 1st Jan, 2018 1,302 Source: KPMG Football Clubs’ Valuation: The European Elite 2018 (9th place)

he 2017/18 season has legitimised market pool has been diminished; The bottom-line result shows a Juventus FC’s primacy in the it will be interesting to see how the drastic drop resulting in a loss of T Italian domestic league with a new mechanism will affect clubs such EUR -19.2 million, the main reason record seventh Serie A title in a row. as Juventus FC, who were the main being the lower profits on disposal Such a historic milestone did not prevent beneficiaries of the old system. of players (-33%), which last year were operating revenues from dropping heavily impacted by the record sale of slightly by 2%, totalling EUR 402.3 The on-pitch titles spurred growth of Frenchman Paul Pogba. million, mainly due to a less successful the Bianconeri’s Commercial revenue UEFA Champions League campaign, up to EUR 144.9 million in 2017/18, Summer 2018 will be long being eliminated at the quarter-finals representing a 21% increase. Income remembered by Juventus FC’s fans. against the eventual winners, from Sponsorships & Advertising (+16%) The club have been able to land one Real Madrid CF. and Merchandising & Licensing (+45%) of the most iconic players in the once again represents the main driver recent football history, Portuguese Consequently, international of such result. The 2017/18 season has superstar Cristiano Ronaldo, 5-time broadcasting revenues have suffered also seen a name change for Juventus Ballon d’Or winner. As mentioned in a major decrease, from a record Stadium in favour of a title sponsor, KPMG’s Ronaldo Economics report, figure of EUR 110.3 million registered Allianz, as a result of the outstanding “CR7” could provide Juventus FC with in 2016/17, thanks to reaching the UCL contract for the naming rights disposal sporting, media, branding and economic final in Cardiff, to EUR 78.2 million in that had already guaranteed the club benefits that might outpace any related 2017/18, a 29% year-on-year decrease. EUR 6.3 million per year in the 2011 (year costs, allowing the club to increasetheir Nevertheless, the Bianconeri are the of inauguration of the stadium) – 2023 revenues, profitability and, ultimately, club that received the most from UEFA period. enterprise value over the next several distributions in the past five seasons years, when major football clubs are (EUR 406 million on aggregate), even During the 2017 summer transfer expected to become true entertainment more than Real Madrid CF, winners of window, Juventus FC were particularly and media corporations. the major European trophy four times in active by signing, among others, In the meantime, his acquisition has this time span. One of the reasons for Brazilian winger Douglas Costa (for already generated an impact for the club such a result is the distribution system EUR 46 million), Italian talent Federico from a social media standpoint (seeing applied by the European association up Bernardeschi (EUR 40 million) and future a +34% increase in Juventus FC’s until 2018, with the market pool heavily World Cup winner Blaise Matuidi (EUR 20 followers in the 6 months following the affecting the allocation of money. million). Despite such squad investments, announcement), lifting the club up to 6th With the new more remunerative total Staff costs remained stable position among the most followed clubs distribution cycle starting from the and so did the staff costs/operating on social media. 2018/19 season, the weight of the revenue ratio (64%).

Commercial revenues and Enterprise Value evolution (2011/12 - 2017/18) in EUR million

160 1,400 1,302 140 1,218 1,200

120 983 1,000 100 800 80 145 600 60 120 103 85 400 40 70 68 76 200 20

0 0 2011/122012/132013/142014/152015/162016/172017/18 Commercial revenues Enterprise Value

Source: KPMG Football Benchmark and KPMG Football Clubs’ Valuation: The European Elite

Key performance indicators

Financial and operational figures (2017/18) in EUR million Manchester Source: KPMG Football Benchmark - Club finance & operations

Matchday 63.9 YoY Operating revenues growth City FC % Broadcasting 238.7 3 Commercial & other 265.6

Total operating revenues 568.1

Staff costs / Premier Operating revenues Total staff costs 293.0 % League 52

Pre-tax profit/loss 11.8

Profit/loss after tax 11.8

Domestic league average attendance 53,812 Utilisation rate % Etihad Stadium capacity 55,017 98

Squad market value in EUR million as at 1st Jan, 2019 Source: KPMG Football Benchmark - Player Valuation 1,182

Top 3 most valuable players:

Kevin De Bruyne (Belgium) 129

Raheem Sterling (England) 110

Leroy Sané (Germany) 100

Total social media followers in million as at 1st Jan, 2019 Source: KPMG Football Benchmark - Social Media Analytics 59

Enterprise Value in EUR million as at 1st Jan, 2018 2,160 Source: KPMG Football Clubs’ Valuation: The European Elite 2018 (5th place)

uring the 2017/18 season, its will to invest into the club in order year. This result highlights the efforts Manchester City FC won their to increase constantly the quality of towards an increased sustainability that D 5th English title, breaking a the squad, by acquiring the best talents could lead the club to long-term financial series of performance-related records across the main leagues. In the 2017/18 stability. Indeed, since 2011/12 the including most goals scored (106) and season in particular, more than EUR club has amassed EUR 151 million most games won (32), as well as being 300 million was invested to bring to in losses, but the 2017/18 season the first team to reach 100 points. The Manchester, among others, French represents the fourth year in a row club also celebrated a League Cup and central defender Aymeric Laporte and with a positive after-tax result. progressed to the quarter finals of the full backs Benjamin Mendy and Kyle UEFA Champions League, where they Walker. The Sky Blues built a real “dream In the current campaign, Manchester were eliminated by domestic rivals team”, flaunting a squad’s market City FC picked up where they left off last Liverpool FC. value of EUR 1.2 billion, the highest season, claiming a comprehensive 2-0 squad market value according to win over Chelsea FC in the Community Record achievements were also KPMG’s Player Valuation Tool. Their Shield, thanks to Sergio Agüero’s double. registered off the pitch, where tiki-taka master, Pep Guardiola, can The club is still very much in the Premier operating revenues reached EUR 568.1 rely on five of the top 25 most valuable League title race, even after a slight dip million, driven by increases mainly in players to pursue the dream of the UEFA in form in December. In the Champions Commercial and Matchday revenues of Champions League. Belgian attacking League, after a shocking first match 4% and 6% year-on-year, respectively. midfielder Kevin De Bruyne (EUR 129 resulting in a home defeat against Commercial revenue (EUR 265.6 million) million) represents the most precious Olympique Lyon, Pep Guardiola’s team represents the main source of income star, followed by Raheem Sterling (EUR managed to make it right and qualified for at 47% of total operating turnover, 110 million) and Leroy Sané (EUR 100 the Round of 16. followed by Broadcasting, comprising million). Despite these investments, the EUR 238.7 million (42% of the total). Cityzens managed to reduce Staff costs After establishing themselves among Etihad Airways’ partnership is one by 5% year-on-year, from EUR 307.2 the elite of English football, the time of the most prominent deals for the million to EUR 293 million; the club’s is ripe for the club to also become a club, guaranteeing EUR 45 million as staff costs/operating revenue ratio also credible and consistent contender on the main shirt sponsor and EUR 11 decreased by four percentage points, the European stage, challenging the million per year for the naming rights to 52%. iconic superpowers and, specifically, to the stadium. Moreover, Cityzens’ attempting to bring the UEFA Champions commercial growth does not look to ebb Due to their policy of constantly pursuing League’s trophy to the “light blue side” thanks to new global partners joining the best players, Manchester City FC of Manchester for the first time. the club, like Gatorade, Tinder and recorded a negative player trading Marathonbet. balance (- EUR 107.5 million), but their bottom-line remained positive, Ten years after its takeover, the reaching EUR 11.8 million, a tenfold Abu Dhabi United Group did not lose increase compared to the previous

Credits: Manchester City FC

Key performance indicators

Financial and operational figures (2017/18) in EUR million Paris Saint- Source: KPMG Football Benchmark - Club finance & operations

Matchday 100.7 YoY Operating revenues growth Germain FC % Broadcasting 127.8 12 Commercial & other 313.3

Total operating revenues 541.8

Staff costs / Ligue 1 Operating revenues Total staff costs 332.1 61%

Pre-tax profit/loss 39.6

Profit/loss after tax 31.5

Domestic league average attendance 46,929 Utilisation rate % Parc des Princes capacity 47,929 98

Squad market value in EUR million as at 1st Jan, 2019 Source: KPMG Football Benchmark - Player Valuation 896

Top 3 most valuable players:

Neymar (Brazil) 229

Kylian Mbappé (France) 215

Marquinhos (Brazil) 60

Total social media followers in million as at 1st Jan, 2019 Source: KPMG Football Benchmark - Social Media Analytics 64

Enterprise Value in EUR million as at 1st Jan, 2018 1,142 Source: KPMG Football Clubs’ Valuation: The European Elite 2018 (11 th place)

aris Saint-Germain FC (PSG) football clubs. The recent, pioneering ones: former FC Barcelona forward returned to winning their domestic 3-year tie-up with Air Jordan (the Nike Neymar Jr. and French “golden boy” title in 2017/18, the 7th in their subsidiary created for former basketball Kylian Mbappé. The move of O’Ney in P th history and the 5 in the last six seasons. super star Michael Jordan) is the most the Tour Eiffel’s city, for a release clause Les Parisiens have also celebrated the representative example of the gradual of EUR 222 million, represents the most victories of the Coupe de France, the mutation of Paris Saint-Germain FC expensive transfer in football history, Coupe de la Ligue and the Trophée from a mere football club into a global followed by Mbappé’s purchase from des champions, while in the UEFA fashion brand. AS Monaco FC for a reported EUR 180 Champions League, dreams of glory million (an acquisition that occurred in were interrupted by eventual winners This commercial development strategy summer 2017 but was completed in the Real Madrid CF at the Round of 16. is possible thanks to the many football summer of 2018 after a one year loan, stars hired by the club over the years. thus having an impact starting from the Operating revenues reached a record An inescapable consequence of this 2018/19 financial year). level of EUR 541.8 million (a 12% is the steep rise in Staff costs, which year-on-year increase), mainly driven by grew by 156% from 2011/12 to 2017/18, After the first half of the season, Commercial & other revenues (EUR achieving a record value of EUR 332.1 Paris Saint-Germain FC do not seem to 313.3 million), accounting for 58% of million (+20% year-on-year), the second have any credible rivals for the Ligue 1 the total. The French champions can rely highest among the clubs covered in title. In the current UEFA Champions on important deals with some of the our report. As a consequence, the staff League campaign PSG won their group major multinationals on the world stage, costs/operating revenue ratio surpassed and will play against Manchester United above all the main shirt sponsorship deal the 60% threshold for the first time. FC in the Round of 16. The ownership’s with Fly Emirates and the kit supplier Nevertheless, the 2017/18 bottom line ambitions on the commercial side are a agreement with Nike, both guaranteeing result showed a remarkable increase on crucial point for further consolidation of the club EUR 25 million per year, as well the previous season: from a loss of EUR PSG as one of the top clubs in the world as a 20-year partnership with Coca-Cola 6.8 million up to a profit after tax of EUR in the near future. recently renewed until 2021. One of the 31.5 million. ultimate aims of the Qatari owner is to make Paris Saint-Germain FC a Speaking of global football stars, the global lifestyle brand, able to attract 2017/18 season saw the City of Lights new markets traditionally not covered by illuminated by two new precious

Credits: Paris Saint-Germain FC

Key performance indicators

Financial and operational figures (2017/18) in EUR million PSV Eindhoven Source: KPMG Football Benchmark - Club finance & operations

Matchday 12.0 YoY Operating revenues growth % Broadcasting 10.6 -28 Commercial & other 39.4

Eredivisie Total operating revenues 62.1

Staff costs / Operating revenues Total staff costs 34.6 56%

Pre-tax profit/loss 0.2

Profit/loss after tax 0.2

Domestic league average attendance 33,344 Utilisation rate % Philips Stadion capacity 35,000 95

Squad market value in EUR million as at 1st Jan, 2019 Source: KPMG Football Benchmark - Player Valuation 160

Top 3 most valuable players:

Hirving Lozano (Mexico) 48

Steven Bergwijn (Netherlands) 18

Gastón Pereiro (Uruguay) 13

Total social media followers in million as at 1st Jan, 2019 Source: KPMG Football Benchmark - Social Media Analytics 2

Enterprise Value in EUR million as at 1st Jan, 2018 Source: KPMG Football Clubs’ Valuation: The European Elite 2018 N/A

utch champions PSV Eindhoven, Champions League prize money is still safely within the standards lifting their 3rd Eredivisie trophy will remain, in the short-medium recommended by UEFA for the purposes D in four years (24th overall), have term, one of PSV’s major revenue of Financial Fair Play Regulations (70%). once again established themselves streams, underlining the importance as AFC Ajax’s main contender, still of continuous participation in the PSV were able to balance the books leading the domestic landscape with 33 competition. thanks to player trading activities, with titles. However, climbing back up to special reference to the profits on the the top of the table did not prevent While both Matchday and Broadcasting disposal of forward Jürgen Locadia and the club from showing a significant income suffered decreases, Commercial midfielder Davy Pröpper to Brighton 28% decrease in operating revenues revenue displayed a 3% increase & Hove Albion, which facilitated a (which totalled EUR 62.1 million), up to EUR 39.4 million, a symptom bottom-line profit of EUR 0.2 million, due to failure to participate in the of how PSV’s brand preserved its approximately EUR 2 million less than final stage of European competitions. appeal and took advantage of the that of the previous financial year. Interestingly, domestic peers AFC Ajax successful domestic season, with The Dutch side have always been at and Feyenoord Rotterdam, which placed Merchandising representing the main the forefront in terms of scouting, and 2nd and 4th in the Eredivisie, recorded source of growth (+33%, to EUR 5.3 the recent performance of Mexican turnover of EUR 91.9 million and EUR million). The 2017/18 campaign was winger Hirving Lozano, purchased 99.4 million, respectively. While the also the second season with a new for a reported EUR 8 million and now former represents the most popular and shirt sponsor, energy company Energie valued at EUR 48 million according to competitive club in the Netherlands, Direct, that replaced historical sponsor KPMG’s Player Valuation Tool, could the latter was able to take advantage Philips. However, the stadium is still likely represent yet another bargain of participation in the UEFA Champions named after the multinational tech acquisition made by PSV and a League group stage. company founded in Eindhoven. Further potential future profit. changes have occurred for the 2018/19 Elimination in the UEFA Europa season, as new commercial director Despite representing a smaller League third preliminary round against Frans Janssen has secured a new shirt market compared to teams in cities Croatian side Osijek proved costly for back sponsor, Eindhoven-based online like Amsterdam and Rotterdam, PSV PSV, who witnessed a drop in UEFA learning company GoodHabitz, which Eindhoven have taken their rightful spot distributions from EUR 24.3 million in will become front jersey sponsor from as a Dutch giant. They truly represent 2016/17 (thanks to participation in the the 2019/20 season. a tough opponent for European UEFA Champions League Group Stage) competitors, as demonstrated by their to EUR 1.6 million in 2017/18. Due to Total Staff costs decreased by 8%, proud displays against FC Barcelona, the limited international appeal of the but the aforementioned 28% drop FC Internazionale Milano and Tottenham Dutch top flight, the size of the local in revenues made the staff costs/ Hotspur FC in this year’s Champions broadcasting market and the ongoing operating revenue ratio increase to League, exhibiting a level of competition 12-year agreement with Fox (EUR 80 56%, 12 percentage points higher than which will likely boost the club’s results million per season expiring in 2025), previous season. However, the indicator at the end of the 2018/19 season.

Credits: PSV Eindhoven

Basis of preparation and limiting conditions

he foundation of this study is an Statements of each club. KPMG Whilst every effort has been made by analysis of the publicly available professionals have not performed any KPMG to make the analysis between T statutory financial statements verification work or audited any of such professional football clubs consistent and (“the Financial Statements”) of the financial information or any of the comparable, in undertaking this research professional football clubs selected for non-financial publicly available we faced several challenges which are the purposes of this report. In respect data obtained from other sources difficult to overcome. Differences of of each professional football club, all considered authoritative. accounting practice in the respective financial figures have been extracted countries, differences in reporting from the Financial Statements of the The squad market values have been currencies, fluctuation in exchange rates1, 2017/18 football season. calculated using the KPMG’s Player and differences in year-ends limit to a Valuation Tool. Based on proprietary certain extent the comparability of data When the Financial Statements of the algorithms, this tool provides market and affect the outcome of our analysis. clubs were not available or whenever values for all players from the top we considered it necessary, we have professional leagues in Europe and South KPMG makes no representations nor consulted with the management of the America (Belgium, England, France, provides any warranties regarding clubs in order to obtain the necessary Germany, Italy, Netherlands, Portugal, the accuracy or completeness of the information or clarifications to support Spain, Turkey, Argentina and Brazil). information contained in this report. our analysis. KPMG, its managers, directors, partners The estimated players’ market values and employees expressly disclaim any The Financial Statements utilised for are aimed at capturing the worth of a and all liability for errors and omissions the purpose of KPMG’s analysis were player based on an analysis of several from the report. Acceptance and/or use acquired from the relevant public thousands of past player transfers, of this report constitutes acceptance of sources in each country. In performing historical sports performance and all the assumptions and limiting conditions our analysis, we also relied upon the drivers that have an impact on the included therein. information of a non-financial nature transfer fees. Our consistent approach obtained from publicly available sources: and methodology, together with an For interpretation of financial terms national governing bodies, trade understanding of the difference between used in this report, please refer to associations, international federations the concept of price and value, might the methodology section of the and social media. explain the possible discrepancies Data & Analytics page of KPMG’s between our value estimate conclusion www.footballbenchmark.com website. The team responsible for the production and the specific price at which a of this report has relied on information transaction has taken place. included in the published Financial

1In order to conduct cross-league analysis and comparison, where the local currency is not the euro, KPMG has converted all local currency figures using the average exchange rate for the twelve months prior to 30 June 2018.

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