The European football market is now worth a whopping €25.5billion ($30.5bn). This bewildering and awe-inspiring figure was revealed by the Deloitte Sports Business Group in its 27th edition of the Annual Review of Football Finance 2018.
According to the report compiled by the professional and financial services company, the overall growth was primarily driven by the ‘big five’ European football leagues – Premier League, LaLiga, Lega Serie A, Bundesliga and Ligue 1, which witnessed the combined revenues increase by 9% during the 2016-17 season. New broadcast arrangements in England, Spain and France have made a considerable impact. Growth was not restricted to the Big Five as the other leagues also registered an increase in their revenues.
The English Premier League has become ‘invincible’ in terms of financial might with an 86% gap in comparison to its nearest competitor’s revenue. The financial results for the 2016/17 season fully affirmed the League’s position as the market leader, with the record £4.5 billion revenue. Each of the 20 Premier League clubs have set their personal revenue records during the study period.
The Premier League registered club revenues of €5.297 bn for 2016-17. Spain’s LaLiga was the next in line with €2.854bn, followed by the German Bundesliga (€2.793bn), Italy’s Serie A (€2.075bn) and France’s Ligue 1 (€1.643bn).
The success of La Liga’s collective sales approach has been such that broadcast revenue growth of 20%, following on from 26% growth in the 2015/16 season, has seen collective La Liga revenue increase to a record €2.9 billion in 2016/17. As a result, the Spanish league has overtaken the Bundesliga to be the second highest revenue-generating football league in the world.
Bundesliga clubs collectively maintained their strong overall revenue growth, primarily through an increase in commercial revenues, up 15% from 2015/16 to €1.4 billion representing almost 75% more than the revenue generated by La Liga, as their traditional strength in this area shone through.
The 2016/17 season saw Serie A revenue grow by 8% to over €2 billion for the first time. The majority of this growth came from commercial sources, with revenue increasing by €91m (17%) on 2015/16, a remarkable €75m (over 80%) of which was solely attributable to Internazionale, following the club’s acquisition by Chinese electronics retailer Suning in June 2016.
France’s Ligue 1 remained the lowest revenue generating league among Europe’s ‘Big Five’ at €1.6 billion in 2016/17, despite entering a new four-year domestic broadcasting rights cycle.
Tim Bridge, director in the Sports Business Group at Deloitte, has stated that “the financial position of European football appears healthier than it has been for a long time, reflecting the global popularity of the game, the professionalism of leading clubs and the strength of the regulatory environment in which they operate. Whilst the Premier League is the clear market leader, we expect to see continued growth and interest across Europe’s leagues in the years to come.”
The 92 Premier League and Football League clubs recorded combined revenues in excess of £5.5bn (€6.24bn/$7.48bn) for the 2016-17 season. With a new broadcast cycle commencing in 2016-17 for Premier League clubs, the 20 clubs generated record revenues of £4.5bn, 25% higher than in the previous season and the benefit was felt further down the football pyramid, with record revenue for the 72 Football League clubs of almost £1bn.
It has been noted that in previous years, any increase in revenue would have been expected to lead to a proportional increase in wages but in an era of regulatory controls, clear market leadership and stronger financial self-discipline, wage costs rose only 9% to £2.5bn. Whilst this still represented a record high, the Premier League’s wages/revenue ratio fell to just 55%, its lowest level since 1997-98 (52%). Most notably, no Premier League club reported an operating loss, the first time that this has ever happened.
Dan Jones, partner in the Sports Business Group at Deloitte, said, “The financial results of the class of 2016-17 are the most impressive we have ever seen. Just a decade ago, 60% of Premier League clubs were making an operating loss whereas in the 2016-17 season, all clubs were profitable. In addition, and for the first time ever, Premier League clubs’ revenues have grown at a faster rate than wages over a 10-year period.
“The recent announcement that the Premier League’s domestic rights selling process for 2019-20 – 2021-22 did not deliver the uplift that followers have become accustomed to over recent years should not be a cause for concern.
“The fact that the Premier League has once again shown its resilience and strength by retaining the vast majority of its audience and value has provided market leading financial security to clubs for at least the next four years, providing they are not relegated. Indeed, once the sales process for the remaining international rights is completed, we expect the league will have delivered overall increases in television revenue.”