European football revenues hit record, driven by ‘big five’ leagues

Top European leagues saw 5 per cent earnings rise in 2017/18, Deloitte says

Celebrations for Manchester City's Premier League title win at the team's Etihad Stadium in May 2019. European football club revenues reached a record €28.4bn last year, said Deloitte. Reuters

The European football market generated a record €28.4 billion in the 2018 financial year – up 11 per cent annually on record revenues from the five biggest club leagues, according to a new report from Deloitte.

The professional services firm’s annual review of football finance found that the ‘big five’ European leagues generated a record €15.6bn in revenue in 2017/18, a 6 per cent increase from the previous year. The five biggest leagues are the UK’s Premier League, Germany’s Bundesliga, Italy’s Serie A, Spain’s La Liga and the French Ligue 1.

“We have seen revenue growth in each of the 18 years we have calculated the size of the European football market,” said Dan Jones, partner and head of the Sports Business Group at Deloitte. The annual revenue growth to which he referred excludes the cyclical impact of tournament finals in the Uefa Champions League – the annual club football competition organised by the Union of European Football Associations – and Fifa tournaments.

“With live football remaining one of the most highly sought after entertainment assets for both attendees and broadcasters, as well as one of social media’s hottest topics, we expect this growth to continue,” Mr Jones added.

Despite revenue growth, however, the big five’s aggregate operating profits fell in 2017/18, as wage spending caught up with significant revenue uplifts generated by English and Spanish domestic broadcast deals the previous year.

Bundesliga and Serie A recorded operating profit increases of 9 per cent and 8 per cent respectively, according to Deloitte. The start of Bundesliga’s new broadcast deal signed in 2018 with Sky Italia and Dazn contributed to an uplift of around €290m in broadcast revenues and saw them replace La Liga as the second largest revenue-generating league in the world.

“While the Premier League continues to lead the way, Spain and Germany are engaged in ongoing competition to be next in line,” Mr Jones said. “We expect Germany to retain its status as the second highest revenue generating league in the next edition, with La Liga potentially overtaking again in 2019/20.”

Taking each league in turn, Premier League clubs’ revenues increased to €5.4bn in 2017/18, from €5.3bn, driven by increased Uefa distributions to English clubs as five teams competed in the Uefa Champions League for the first time. In revenue terms, the Premier League is now 72 per cent larger than the Bundesliga – whose 2017/18 revenues grew to €3.2bn – however, its wages to revenue ratio worsened in the last season to 59 per cent, as wages increased 15 per cent, the report showed.

The Bundesliga remains the best-attended European league, with average crowds of over 43,000 last year.

Spain’s La Liga clubs’ revenues broke the €3bn barrier for the first time after growth of 7 per cent year on year, according to the report. The increase was driven in part by Real Madrid’s third consecutive Uefa Champions League triumph in the 2017/18 season, as well as Barcelona’s commercial growth that included a new four-year shirt sponsorship with Rakuten.

Italy’s Serie A saw 8 per cent growth in revenues to reach €2.2bn – significantly behind that of the English, German and Spanish leagues. “It was not enough to narrow the ever-increasing gap,” said Deloitte. Wage cost increases were slower than the other leagues, too, although Juventus’ acquisition of Cristiano Ronaldo and other transfer activity in the 2018 summer window is likely to result in wage increases in the 2018/19 season.

Meanwhile, France’s Ligue 1 continued to generate the least revenue of Europe’s ‘big five’ leagues, at €1.7bn, the report said. Reductions in broadcast and sponsorship revenue were offset by increases in match-day and other commercial income, but the league must wait until 2020/21 for its next significant broadcast rights increase, when domestic rights values are set to increase by more than 55 per cent to around €1.2bn per season, Deloitte noted.

This is greater than the current domestic rights value of Serie A (€1bn) and similar to the domestic rights fees currently received by La Liga.