European football’s governing body Uefa has revealed that clubs in the continent’s top divisions were profitable for the second year running, as the percentage of total revenue generated by the ‘big five’ leagues rose to its highest-ever level.
Uefa today (Thursday) released the 11th edition of the European Club Footballing Landscape report, its annual club licensing benchmarking report on European club football, analysing the 2017-18 financial reports from all 712 clubs in the top divisions.
The 2016-17 report detailed the first profitable year with a mark of €615m ($686m). Although this overall profit figure has fallen to €140m in 2017-18, Uefa has pointed out that a second consecutive year of overall profitability still represents a significant turnaround compared with the €5bn of losses that were recorded in just three years at the turn of the decade before the Financial Fair Play regulations were introduced.
In the foreword to the report, Uefa president Aleksander Čeferin said: “As financial performance has improved, clubs’ financial position has become significantly healthier, with net assets increasing from less than €2bn to more than €9bn in the space of a decade, a testament to the success of Uefa’s Financial Fair Play regulations, the stable European football ecosystem and sustained and sensible investment.”
The 132-page report seeks to demonstrate how the stable European football ecosystem has helped club football to 20 consecutive years of revenue growth. Top division European club revenues increased in total from €20bn to €21bn in 2018.
However, it also points out that revenues continue to concentrate around those generated by the ‘big five’ leagues reaching a record high of 75 per cent, up from last year’s mark of 69 per cent. This is largely at the expense of countries outside the top 10, whose share has fallen from 16 to 12 per cent.
The report found the combined revenues of the 20 English Premier League clubs, €5.4bn, was more than the 617 clubs in all 50 leagues below the top four. The Premier League also continues to outshine its nearest European rivals, with German Bundesliga clubs bringing in €3.2bn, Spanish LaLiga teams €3.1bn, Italian Serie A clubs €2.3bn and French Ligue 1 teams €1.7bn.
Uefa added that preliminary reporting from 2019 indicates that, for the first time, the top 30 clubs will be responsible for more than half of all top division club revenues. On the other side of equation, the wage bill of the 98 ‘big five’ clubs increased by more than €1bn, representing 88 per cent of all wage growth, and these clubs were responsible for 85 per cent of gross transfer spending and 75 per cent of top division transfer earnings.
A total of 38 countries grew their revenues in 2018, down from the record 43 in 2017. All in all, 15 countries reported revenue growth of more than 15 per cent, a further 14 countries reported growth of between five and 15 per cent, and nine countries reported growth of less than five per cent.
Clubs’ ability to generate revenues varies enormously across Europe’s top divisions – from England, where clubs generate €272m on average and an aggregate total of €5.4bn, to San Marino, where the 15 clubs generate an average of €170,000 and an aggregate total of €2.6m. England’s Premier League clubs reported more revenue in 2018 than all 617 clubs in the bottom 50 countries combined.
Other key findings in the report include that average domestic top division league attendances reached a record high in 2018-19 with 105 million spectators in total. Uefa said improving stadium infrastructure led to an eight per cent increase in ticketing revenues.
On the back of “exceptional” TV-driven profits reported last year, wages increased at a faster rate (9.4 per cent) in 2018. The wage growth was principally driven by clubs in the wealthiest leagues and the main KPI, the wages to revenue ratio, now stands at 64 per cent.
The release of the reports comes amid an uncertain period for Uefa club competitions. In September, Uefa announced the launch of a new club competition, the Europa Conference League. This will be a third-tier competition sitting below the Champions League and Europa League, and will kick off in 2021.
This came shortly after efforts from Uefa and the continent’s elite clubs to reform the Champions League into a competition essentially reserved for the top teams seemingly hit the buffers following a meeting of the European Club Association (ECA).
Uefa and ECA chairman Andrea Agnelli, who serves the same role at Italian Serie A club Juventus, had championed reformatting the Champions League as a semi-closed competition from the 2024-25 season onwards, arguing that this would create greater commercial certainty for smaller European clubs who have to qualify for the group stages every year.
Writing in the Uefa report, Čeferin added: “The report highlights a number of threats to continued European football stability and success. These include the risks of globalisation-fuelled revenue polarisation, of a fragmenting media landscape and of cases of over-dependence on transfer activity revenue. The report also shows that European club football is strong, united and resilient, and I am certain that European football can and will overcome these challenges and others just as successfully as we dealt with the threat of spiralling losses in the recent past.”