Latest benchmarking report underlines continued Financial Fair Play impact on robust European club finances
UEFA has released its ninth club licensing benchmarking report on European club football, named ‘The European Club Footballing Landscape”. The latest report again highlights how UEFA’s Financial Fair Play regulations have transformed football finances, creating a more stable and sustainable financial position for European top-division clubs.
The report offers an exhaustive and exclusive review of the continental club game, and a thorough analysis of the financial development of European football.This detailed report shows that the positive revenue, investment and profitability trends identified in last year’s report are continuing.
In his foreword to the report, UEFA President Aleksander Čeferin said: “Clubs are generating revenue but they are also investing in assets and infrastructure, thanks in a part to UEFA’s financial fair play regulations. For the first time, club investments in stadiums and other long-term fixed assets exceeded €1bn in 2016. It is therefore perhaps not surprising that an increasing number of national associations and leagues, both inside and outside Europe, are starting to implement their own versions of financial fair play.”
Indeed, this comprehensive picture of football finance shows the hugely positive impact that Financial Fair Play has had on improving the underlying finances of European club football:
- The 700 top-division clubs together are generating year-on-year revenue growth of almost 10%. You need to go back to 2002 to find a faster rate of growth in European club revenues.
- In recent years (2010 to 2016), European club football has become less reliant on donations/grants and other one-off revenues (down 12%), with gate receipts up 7%, sponsorship and commercial revenue up 59%, TV revenue up 64%, transfer income up 105%, and UEFA prize money and solidarity payments up 106%.
- Despite wages growing at the fastest rate since 2010, clubs reported the highest operating profits (before transfers) in history of more than €800m in 2016.
- Bottom-line losses after transfers, financing and tax decreased to €269m in 2016 – this is less than one-sixth of the club losses recorded prior to the introduction of financial fair play.
- A record 26 leagues generated profits in 2016 (as an aggregate of the clubs’ results in each league) – this could be said of just 9 leagues in 2011, prior to the introduction of financial fair play.
- Net debt continues to fall, from 65% of revenue before the introduction of financial fair play in 2011 to 40% in 2015 and down to 35% in 2016. Conversely, club net assets have doubled during this period.
The report builds on those of previous years, setting discussions about competitive balance in context by documenting the different aspects of financial polarisation, with Aleksander Čeferin stating: “The data from this report and other research from our new intelligence centre helps inform our decision-making. Once more, we cannot help but note that the polarisation of commercial and sponsorship revenues between the top tier of clubs and the rest is accelerating. As the guardians of the game, UEFA must ensure that football remains competitive even as financial gaps are augmented by globalisation and technological change.”
Here are some other key findings from the report:
- The wide disparity in TV revenues continues to be the main differentiating factor between leagues, with TV deals in the ‘big 6’ leagues generating 11 times the revenue of those in the other 48.
- Clubs’ ability to leverage their brands is the single most important differentiating factor between the top dozen clubs and the rest. Looking back across the last two business cycles (2010 to 2016), the 12 largest and most global clubs have generated an extraordinary €1.58bn increase in income from their sponsorship deals and commercial activities. This compares with increases of just €700m for the rest of Europe’s top-division clubs combined.
The report focuses not only on pure financial metrics, but also shows that:
- Across the ‘top 15’ European leagues there have been 40 clubs taken over by foreign investors since 2010, with China the most active in the last two seasons. Since 2016 more than 70% of all foreign takeovers in the ‘top 15’ leagues have involved Chinese investors. In this period, Chinese owners have taken over clubs in the English Premier League and Championship, Italy’s Serie A, France’s Ligue 1, Spain’s La Liga and the Netherland’s Eredivisie.
- The attendances of 50 top domestic leagues total just under a hundred million for the 2016/17 season. Compared to the 2015/16 season, total attendances decreased by one percent, due to the mix of promoted/relegated clubs in England and Germany.
- Social media analysis highlights the rise of player ‘brands’. While the 20 top club brands still welcome higher numbers of Facebook followers than their top players, the top 20 player brands now have more than 50% more Twitter followers than their clubs.
Sefton Perry, UEFA’s Head of UEFA Intelligence Centre (analytics), UEFA Financial Stability & Research, explains in the report introduction: “We present the facts – some positive and some less so. This has been acknowledged by all the major football stakeholders who rely on the publication as a definitive guide to off-pitch developments in club football...Few, if any, activities come close to matching the continuous 10% year-on-year growth in revenues that European club football has generated since the turn of the century. This is a testament to the underlying strength and depth of existing supporter loyalty and the ability of clubs to reach out to new supporters.
“For other industries changes in the landscape are accepted as an inevitable fact of life. However for European football, with its unique, stable model of more than a thousand professional football clubs, a direct connection from the grassroots to the professional game and the importance of mutual cooperation and competition between clubs, changes to the landscape can bring challenges.”