Commercial Revenues Drive Growth Commercial Revenues Drive Growth
Top European football clubs are growing operating revenues, driven primarily by expanding commercial activities, despite growing staff costs – these are the major trends concluded in “The European Champions Report 2019” launched today by KPMG’s Football Benchmark team.
The third edition of the report reviews and compares some of the most relevant business performance indicators of the champions of Europe’s eight most prominent leagues in the 2017/18 season – FC Barcelona, FC Bayern München, FC Porto, Galatasaray SK, Juventus FC, Manchester City FC, Paris Saint-Germain FC and PSV Eindhoven.
Barcelona can boast the highest operating revenue (net of transfer proceeds) (EUR 689 m) among the eight champions, followed by Bayern München (596)1 and Manchester City (568).
Six of the eight football clubs recorded increased operating revenues. The exceptions were Juventus and PSV Eindhoven. Juventus’ revenues dropped slightly by 2%, mainly due to a less successful UEFA Champions League campaign, being knocked-out at the quarter-finals against the eventual winners, Real Madrid. PSV Eindhoven suffered a bigger blow, a 28% drop in revenues, due, again, mainly to their failure to participate in the final stage of a European competition.
The report also reveals that clubs that represent a league with limited international appeal and a smaller local broadcasting market rely more on the prize money of major UEFA tournaments, especially the Champions League. For them, continuous participation in these competitions is a key factor in increasing their revenue stream in the short to medium term.
Football players are the true assets
Meanwhile, increase is the trend on the costs side as well. The majority of the clubs suffered an increase in staff costs, the main expenses for a football club. The historic transfer of Brazilian striker Neymar from Barcelona to Paris Saint-Germain for EUR 222 million, and the “domino effect” it caused with Barcelona acquiring Dembélé and Coutinho as replacements, were some of the main contributors to staff cost increases for these two clubs. Indeed, Barcelona registered EUR 562 million, which is also the highest increase year-on-year (+42%), while PSG reached EUR 332 million (an increase of + 20%).
Football players represent the core asset for football clubs and their transfers continuously grab the headlines, as clubs fight to secure the best talents. KPMG’s report also provides information on the eight European champions’ squads' market value, based on KPMG’s proprietary Player Valuation Tool, which estimates the market value of players as at 1 January 2019. Manchester City possess the most valuable team (EUR 1,182 million), while at player’s level, Neymar is the most valuable football player (EUR 229 million), followed by Kylian Mbappé (EUR 215 million) and Lionel Messi (EUR 203 million).
About KPMG’s Football Benchmark
Our business intelligence tool standardises and consolidates the financial, operational and social media data of hundreds of professional football clubs. footballbenchmark.com