Deloitte report: European football has made a ‘significant recovery’ after the Covid pandemic

Deloitte report: European football has made a ‘significant recovery’ after the Covid pandemic

Real Madrid players with the Champions League in 2022
International broadcasting rights to the Spanish La Liga are worth approximately £760m.

The European soccer market made “a significant recovery” in 2020-21 despite fans being absent for most of the season, finance company Deloitte says.

In 2019-20, The coronavirus pandemic saw European league revenue decline for the first time since 2008-09.

But revenue from deferred transmission and the success of Euro 2020, delayed until the summer of 2021, were the main factors of change.

Revenues from the ‘big five’ European leagues (England, Spain, Italy, Germany, France) are now projected to exceed pre-pandemic levels in 2021-22.

Deloitte’s Tim Bridge, speaking on his company’s ‘Annual Football Finance Review’, said leagues and clubs now need to “seek outside investment” and that there has been a “change in trends around football spending”. transfers and club operations”.

However, now he predicts “an exciting period” that “will challenge clubs to break with tradition.”

“It is testament to the resilience of the industry, the value driven by broadcast deals and the success of the European Championship that the European football market has achieved tenacious growth, in terms of revenue, over the past year,” said Bridge.

Key findings from Deloitte’s annual football finance review

  • The European football market grew combined revenue to £24.4bn in 2020-21, up 10% from the previous year
  • Premier League club revenue rose to £4.9bn, up 8%
  • The ‘big five’ European leagues generated £13.8bn in revenue, up 3%
  • The Premier League was the only one of the ‘big five’ in which clubs improved total operating profit: from £49m to £479m.
  • The ‘big five’, excluding the Premier League, reported an increase in total operating losses, from £408m to £797m.
  • Premier League clubs’ net debt at the end of 2020/21 was £4.1bn, up 4%
  • Championship clubs net debt was £1.8bn, an increase of 32%

General

The ‘big five’ European leagues account for a 57% share of the European football market, but revenue polarization between and within European leagues continues to grow.

In 2019-20, the seasons of the Premier League, Serie A, La Liga and Uefa club competitions were completed during the 2020-21 financial year, so a portion of broadcast revenue related to 2019- 20 is actually recognized in 2020-21.

Late broadcast revenue is the main reason for the Premier League’s growth in 2020-21, while Series A revenue rose 23% to a record £2.2bn.

Revenues in La Liga and the Bundesliga fell slightly while those in Ligue 1 grew by just 1%.

The Premier League is further ahead of the competition than ever and is expected to extend its revenue lead.

It generated almost twice as much as the Bundesliga (£2.7bn) in 2020-21, with La Liga and Serie A a little further behind.

With the return of fans and a new UEFA broadcast cycle from 2021-22 to 2023-24, the 2022-23 season is forecast to see the ‘big five’ generate a record aggregate revenue of £16.4 billion.

Premier league

Premier League club salary costs rose 5% to £3.5bn in 2020-21, with only seven of 17 consistent Premier League clubs reporting a reduction.

While operating profits increased, only four clubs reported pre-tax profits and pre-tax losses remained significant despite falling from £991m to £669m.

Furthermore, 78% of the Premier League’s aggregate commercial revenue was generated by its ‘big six’ clubs.

The average income per club was £243m, with the sixth highest, Arsenal (£325m), well above the seventh highest, Leicester City (£226m).

While the revenue gap between the ‘big six’ and the rest has narrowed by £56m, it is expected to grow as matchday revenues rise and the ‘big six’ benefit from the new streaming cycle of UEFA.

Bridge said the Premier League had “emerged from the pandemic without as significant an increase in net debt as many might have expected”, but stressed the need for “strong governance and financial planning in the coming years”.

english football league

The competitive advantage of clubs with parachute payments has affected the Championship, along with the cycle of clubs betting on promotion.

Combined revenue was down 12% to £600m, largely due to matchday revenue falling by £101m, and although Championship clubs managed to cut salary costs by 8% at £747m, they topped revenue for the fourth consecutive year, with record salaries. ratio / income of 125%.

In League One, club revenue fell 22% to £129m and average salary costs of £5.5m exceeded revenue for the first time with a wage-to-earnings ratio of 103%.

Looking at League Two, the club’s revenue fell 4% to £94m and salary cost was £3.1m, an 80% ratio.

“There can now be no doubt that significant change is required to drive long-term financial sustainability in the Championship,” added Bridge.

women’s game

Deloitte was unable to perform the same type of audit on the women’s game as it did on the men’s.

But, after a record year, with more tickets sold at Euro 2022 than any other European Women’s Championship (500,000) and a record 17.4 million viewers tuning in to BBC coverage of the Euro 2022 final, between England and Germany, Deloitte says it will continue to report on the progress of the women’s game.

Commercial was the largest revenue stream for women’s clubs, contributing more than 50% of total revenue, with clubs reporting a 30% increase overall in 2020-21, the period of greatest growth.

Broadcast revenue grew by over 20% with the Women’s Super League securing an £8m rights deal with the BBC and Sky Sports, increasing viewership by 285% in its first year.

UEFA says that women’s football in Europe could have a commercial value of £578m a year by 2033, with the game’s fanbase potentially increasing from 144m to 328m over that period.

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