Captains of industry Football Money League Sports Business Group January 2013 Real Madrid become the first sports club to surpass the €500m revenue threshold in a single year Contents 2 Welcome 7 How we did it 8 Ups and downs 10 The Deloitte Football Money League 36 Delivering more to sport Edited by Dan Jones Sub-editor Austin Houlihan Authors Alex Bosshardt, Timothy Bridge, Chris Hanson, Andy Shaffer, Chris Stenson and Alexander Thorpe Sports Business Group at Deloitte PO Box 500, 2 Hardman Street, Manchester, UK M60 2AT Telephone: +44 (0)161 455 8787 E-mail: [email protected] www.deloitte.co.uk/sportsbusinessgroup January 2013 Football Money League 2013 Sports Business Group 1 Welcome Hardy perennials Welcome to the 16th edition of the Deloitte Football Real Madrid again top the Money League rankings, Money League, in which we profile the highest earning matching the eight year hegemony that Manchester United enjoyed between 1996/97 and 2003/04, and are clubs in the world’s most popular sport. Published eight the first club to surpass the €500m revenue threshold in months after the end of the 2011/12 season, the Money a single year. Real have led the way in the phenomenal League is the most contemporary and reliable analysis of level of revenue growth enjoyed by the sport’s top clubs the clubs’ relative financial performance. over the past two decades. FC Barcelona retain second place, maintaining a There are a number of financial and non-financial Spanish one-two in the Money League for the fourth methods that can be used to determine a club’s relative successive year, whilst the top six clubs remain size – including measures of attendance, fanbase, unchanged for a fifth successive year, emphasising the broadcast audience, or on-pitch success. In the Money fact that these clubs have some of the largest fanbases League we focus on clubs’ ability to generate revenue and hence strongest revenues, in both domestic and from day to day football operations. international markets. We therefore rank them on those revenues, including All of our top 20 clubs are based in one of Europe’s matchday ticket and corporate hospitality sales, ‘big five’ European markets – England (seven clubs), broadcast rights revenues including distributions from Italy (5), Germany (4), Spain (2), and France (2). participation in European club competitions, sponsorship, merchandising, and other commercial operations. Further down the top 20 rankings, many of the movements in rankings year on year can be attributable to relative performance in European club competitions. Growing well This year’s edition has one new entrant, with English 2011/12 represented another strong year of revenue club Newcastle United replacing Spanish club Valencia. growth for the Game’s elite clubs, with the top 20 Money League clubs generating over €4.8 billion in 2011/12, a 10% increase on the previous year. Real progress In retaining top position in the Money League, Real Double digit percentage revenue growth in 2011/12 Madrid generated revenues of €513m in 2011/12, an represents continued remarkably strong performance in increase of €33m (7%), and become the first club from these tough economic times. any sport to earn more than €500m in a single year. The 2011/12 revenue total is four times the combined The Spanish club’s revenue growth has been revenues of the top 20 earning football clubs back in remarkable. In 1996/97, the first season for which we 1996/97, the first year of our Money League analysis, published our Money League analysis, Real generated emphasising the staggering levels of growth achieved. revenues of €85m, one sixth of the revenues they The sport’s top 20 revenue generating clubs now generated in 2011/12, and insufficient to make the top contribute over a quarter of the total revenues of the 30 in the current list. Over the fifteen years since, the European football market, and can be expected to club’s revenue has grown by €428m at a compound generate over €5 billion between them in 2012/13. growth rate of 13%. Whilst in local currency, eight of the top 20 clubs The majority of Los Blancos’ revenue growth over this experienced a drop in revenue, in most cases this was period has been under the stewardship of president due to less successful on-pitch performance in European Florentino Perez, from 2000 to 2006 and 2009 to the club competitions, and resulting reductions in matchday present, who has implemented a strategy that has revenues and central UEFA distributions, rather than grown revenues, and in particular commercial revenues, wider recessionary impacts. to reflect the club’s domestic and international fanbase. 2 Total revenues 2011/12 (€m) 550 6 500 . 2 1 5 3 8 450 4 400 9 . 5 9 3 4 . 350 8 6 3 6 . 300 2 2 3 3 . 6 0 . 9 5 2 8 2 250 9 . 6 5 2 2 . 3 3 200 2 Whilst debate and discussion continues into the future 4 . 1 of La Liga’s broadcast model, with the current individual . 5 9 . 9 9 2 5 7 . 8 5 1 . 9 . 8 8 . 1 rights selling model exacerbating polarisation in revenue 5 4 1 7 1 1 3 . 7 3 9 150 1 3 . 1 . 1 1 4 1 5 5 generating ability between Spanish clubs, Real still enjoy . 2 1 1 8 1 1 1 4 e l 1 a balanced revenue model between the three key l i e s s i r r d 100 d a u streams of matchday (25% of total revenues in a e n d n p t i u s y e n M t t t n i i h o m V 2011/12), broadcast (39%) and commercial (36%). o e e c n y t U l C i S a r d L H a r r U n n r o d n e e i e 4 e u e o e t r t m D l l o l u u 0 s g i s a n t 50 d a e M r o s q z q a e s e a a i l i e c i h a l u m u i a o r a i h h s n a l k p p t e n l b o r c The revenue model is also relatively robust to n s M c p a c s n o n e r r l a M e l R m u m n B n t e e w m p e e e r y h a t y y s a a t v l l S e a a v C r h c a e o C i o u n fluctuations in on-pitch performance. With expansion of S A F O H O A R C L T N I M A B N M B J 0 the club’s Bernabeu home planned, and further commercial revenue generating opportunities available, Real are likely to be difficult to displace at the top of the Source: Deloitte analysis. Real Madrid’s revenue Money League, in the near future at least. growth has been Flourishing climbers remarkable. In 1996/97, Manchester City are the joint highest climbers in this year’s Money League, moving up five places to seventh the first season in which and claiming a top ten position for the first time. The investment in the playing squad by the club’s Abu Dhabi we started our Money based owners propelled them to their first Premier League analysis, they League title in 2011/12, whilst they also participated in generated revenues of the Champions League for the first time. This combined with commercial revenue increases, with €85m, one sixth of the strong support from Middle East partners in particular, revenues they generated facilitated a £78m (51%) growth in revenues to £231m (€286m) in 2011/12, with the club looking well set to in 2011/12. consolidate a place within the Money League top ten. Football Money League 2013 Sports Business Group 3 New blooms A trend in the wider global economy and sports market The substantial stadia investment in is the increasing financial strength and influence of both Brazil and Russia in order to host emerging markets. Football is no different. the next two World Cups, means Whilst all our top 20 clubs are from the ‘big five’ European markets, Dutch club Ajax and Turkish club that clubs from these countries Galatasaray are amongst the group of clubs immediately potentially have a strong platform below, with revenues of €104.1m and €95.1m to challenge the dominance of clubs respectively. Brazilian club Corinthians are the highest placed non- from Europe’s ‘big five’ Leagues European club with revenues of €94m. This places the in future years. current FIFA Club World Champions amongst the clubs immediately below the top 20. A growing economy has contributed to increasing Italy’s Old Lady, Juventus, return to the top ten thanks to broadcast and commercial revenues for Brazil’s top a tremendous season on the pitch, winning Serie A with clubs. These factors combined with the substantial an unbeaten record, whilst also participating in the stadia investment committed or planned in both Champions League. Brazil and Russia in order to host the next two World Cups, in 2014 and 2018, means that clubs from Schalke 04 drop out of the top ten, as a result of not these countries potentially have a strong platform to matching their feat of reaching the Champions League challenge the dominance of clubs from Europe’s semi-finals, as do Internazionale for the first time in a ‘big five’ Leagues, and hence enter the lower half of decade.