Deloitte says that after the COVID pandemic, European football has managed to make a “significant recovery.”
Deloitte says that after the COVID pandemic, European football has managed to make a “significant recovery.”: Deloitte, a finance company, says that the European football market made “a significant recovery” in 2020-21, even though most fans were not there for most of the season.
Because of the coronavirus pandemic, the income of European leagues fell for the first time since 2008-09 in 2019-20. But the biggest reasons for the change were delayed broadcast revenues and the success of Euro 2020, which was moved to the summer of 2021. In 2021-22, the “big five” European leagues (England, Spain, Italy, Germany, and France) are expected to make more money than they did before the pandemic.
Tim Bridge of Deloitte said in his company’s “Annual Review of Football Finance” that leagues and clubs had worked hard to find outside investment after the pandemic and that there had been a “shift in trends around transfer spending and club operations.” But he now says that there will be “an exciting time” that will “challenge clubs to break from tradition.”
“It’s testament to the resilience of the industry, the value driven by broadcast deals and the success of the Euros that the European football market has achieved tenacious growth, in revenue terms, over the past year,” said Bridge.
Main conclusions from Deloitte’s annual review of football finances
General
The “big five” European leagues make up 57% of the European football market, but there is still a big difference in revenue between and within European leagues. The 2019-20 seasons of the Premier League, Serie A, and La Liga, as well as the UEFA club competitions, ended during the 2020-21 financial year. Because of this, a portion of the broadcast revenue from 2019-20 is actually counted in 2020-21.
The main reason for the Premier League’s growth in 2020-21 is deferred broadcast revenue. On the other hand, Serie A’s revenue grew by 23% to a record high of £2.2bn. On the other hand, La Liga and the Bundesliga saw a slight drop in income, while Ligue 1’s income increased by just 1%.
The Premier League is ahead of the competition in terms of revenue more than ever before, and this lead is likely to grow. In 2020-21, it made almost twice as much as the Bundesliga (£2.7bn), with La Liga and Serie A not far behind. With fans returning and a new UEFA broadcasting cycle from 2021-22 to 2023-24, it is expected that the “big five” will make a record £16.4bn in total revenue during the 2022-23 season.
Premier League
In 2020-21, the wage costs of Premier League clubs went up by 5%, to £3.5 billion, and only seven of the 17 clubs that always play in the Premier League said they went down.
Even though operating profits went up, only four clubs reported a profit before taxes, and pre-tax losses were still significant even though they went from £991m to £669m. Also, the Premier League’s “big six” clubs brought in 78% of the league’s total revenue from sales. The average amount of money each club made was £243 million, with Arsenal (£325 million) coming in sixth and Leicester City (£226 million) coming in seventh.
Even though the difference in revenue between the “big six” and the rest decreased by £56m, it is expected to grow as matchday revenue rises and the “big six” benefit from the new UEFA broadcast cycle.
Bridge said that the Premier League “came out of the pandemic without as much of an increase in net debt as many might have expected,” but he stressed the need for strong governance and financial planning in the years to come.
English Football League
The cycle of clubs betting on promotion has affected the Championship, as has the fact that clubs with parachute payments have a competitive edge.
Combined revenue fell by 12% to £600m, mostly because matchday revenue fell by £101m. Championship clubs were able to reduce wage costs by 8% to £747m, but they still spent more than they made for the fourth year in a row, with a record high ratio of 125% of wages to revenue.
In League One, club income dropped by 22% to £129 million, and for the first time, average wage costs of £5.5 million were higher than club income (103%).
In League Two, club income dropped by 4% to £94m, and wage costs were £3.1m, for an 80% ratio.
“There now can be no doubt that significant change is required to drive long-term financial sustainability in the Championship,” added Bridge.
Women’s game
Deloitte couldn’t do the same kind of audit on the women’s game as they did on the men’s game. But after a record-breaking year in which more tickets were sold for Euro 2022 than any other European Women’s Championship (500,000) and a record 17.4 million people watched the Euros final between England and Germany on the BBC, Deloitte says they will continue to report on the progress of the women’s game.
Commercial was the biggest source of income for women’s clubs, bringing in more than half of their total income. In 2020-21, when growth was most potent, clubs reported an increase of 30% in total income.
The Women’s Super League signed an £8 million rights deal with BBC and Sky Sports, which increased viewership by 285% in its first year and led to a 20% increase in broadcast revenue.
UEFA says that women’s football in Europe could be worth $578 million a year in business by 2033, when the number of fans could grow from 144 million to 328 million.