Real Madrid break 400 million euro revenue barrier
March 2, 2010
Real Madrid have become the first sports team in the world to generate annual revenue in excess of 400 million euros (362 million pounds, 543 million dollars), according to figures compiled by accountancy firm Deloitte.
The latest edition of the Deloitte Football Money League published on Tuesday also shows Spanish giants Real as the world’s largest revenue generating football club, for the fifth consecutive year.
Real’s broadcast income of 161 million euros was greater than the total revenue of all but the top ten clubs in the Deloitte table.
Their arch domestic rivals Barcelona moved up into second place, primarily as a result of winning last year’s Champions League final while Barca’s beaten opponents Manchester United dropped down into third position, partly as a result of sterling’s depreciation against the Euro.
Although the Premier League saw Portsmouth enter administration last week, and doubts persist over the huge debts being carried by United, who recently launched a 500 million pounds bond issue scheme, seven English clubs feature in Deloitte’s top 20 with Arsenal moving up into fifth place.
Figures in the report showed the world’s most financially successful football clubs had managed to weather problems caused by the global economic downturn.
Overall revenues for the top 20 clubs increased in 2008/09 and were over 3.9 billion euros, as, the report said “top clubs showed relative resistance to the economic downturn”.
Dan Jones, partner in Deloitte’s sport business group, said: “Real Madrid’s 10 percent increase in revenue to 401 million euros (342 million pounds) came despite a relatively disappointing season domestically and in Europe.
“Broadcast income provided Real with its largest increase in revenue, and at 161 million euros (137 million pounds) is now greater than the total revenue of all but the top ten Money League clubs.
“Barcelona’s unprecedented on-pitch success, winning a domestic double and the Champions League, helped drive a revenue increase by 57 million euros, the largest absolute increase of any Money League club, to 366 million euros.
“This resulted in a Spanish one-two at the top of the Money League as, like in Rome last May, Barcelona proved just too strong for Manchester United. United slip to third and, like other English clubs, were impacted by the continuing depreciation of the Pound Sterling against the Euro.
“The scale of this is shown by the fact that if exchange rates remained at their June 2007 level, United would be top of the Money League table.”
Chelsea, Liverpool, Tottenham Hotspur, Manchester City and Newcastle, despite being in the second-tier Championship, were the other English clubs in the top 20.
UEFA chief Michel Platini has repeatedly hit out at ‘financial doping’ of clubs, in moves seen as thinly veiled attacks on the financial structure of several leading English teams.
But Jones said: “Whilst there has been much recent comment on the finances of English football clubs, we believe the fundamentals of football remain strong.
“Financial problems experienced at the very highest level are far more likely to be a result of mismanagement, weak cost control or a lack of available credit than any problems with revenue generation.”
All of the ‘big five’ European leagues featured in the list with Germany contributing five clubs, Italy four, and France and Spain represented by two teams each.
LONDON (AFP)
Tags: 500 million pounds, barca, bond issue, business group, clubs barcelona, deloitte, depreciation, economic downturn, english clubs, first sports, football club, league clubs, manchester united, relative resistance, sport business, sports team, third position, top clubsRelated posts
Pepe confident Real Madrid lingerie line will be a hit
December 4, 2009
Real Madrid defender Pepe said Thursday that he was confident that the lingerie line for women which the Spanish giants plan to launch next year would be a hit.
“I am sure that a club with so much history and such special fans will have supporters who will buy them,” the 26-year-old told a news conference following a training session.
The slips and bras bearing Real’s logo will be made by Valencia-based textile company Little Kiss and they will hit store shelves in March alongside the souvenir jerseys, t-shirts and other club souvenirs already on offer.
Leaked photos of models wearing the lingerie were published in sports daily Marca on Wednesday and quickly circulated around the Internet.
“It is great. The girls are very pretty,” the Brazilian-born Portuguese international added.
Growing revenues from merchandise sales combined with increasingly shrewd global marketing have made Real the world’s largest revenue-generating club, according to an annual ranking compiled by business advisory firm Deloitte.
Real pushed Manchester United into second place in the annual Deloitte Football Money League in the 2004-05 season and has maintained the top place ever since.
The club’s marketing revenues from sales of souvenir jerseys and other objects bearing Real’s logo account for more than 100 million euros of its annual budget of over 400 million euros.
MADRID (AFP)
Tags: 100 million, advisory firm, deloitte, giants, global marketing, lingerie line, little kiss, MADRID, Manchester, manchester united, marca, merchandise sales, news conference, pepe, portuguese, real madrid, slips, souvenirs, store shelves, textile company, training session, ValenciaRelated posts
Premier League spending drops as clubs tighten belts
September 2, 2009
Premier League clubs’ spending on new players dropped by 10 percent to 450 million pounds (511 million pounds) during the close-season transfer window which shut on Tuesday.
Even Manchester City’s 120 million pounds (136 million euros) spree failed to see the top flight match the record sum of 500 million pounds (568 million euros) spent a year ago.
Football finance experts believe the high rate of the euro and 50 percent tax rate for the very high-earners has contributed to the drop, particularly in terms of players coming from the continent.
Paul Rawnsley, director of Deloitte’s Sports Business Group, said the figures were no surprise – and net spending has dropped from 200 million pounds (227 million euros) to 80 million pounds (90 million euros) as clubs such as Manchester United, Arsenal and Liverpool resisted spending all their earnings from transfer income from Cristiano Ronaldo, Emmanuel Adebayor and Xabi Alonso.
Rawnsley said: “Despite the significant spending by Manchester City, Premier League clubs’ transfer spending has dropped.
“There are a number of contributory factors – the exchange rate, the tax regime in Spain being more favourable to players and clubs, and perhaps clubs thinking there is less of a risk in buying established Premier League players than from overseas.”
Rawnsley does not expect the picture to alter next year either even if, as expected, the top flight benefits from a big rise in the value of overseas TV rights.
He added: “Economic conditions may improve in 2010 and the Premier League is expected to secure enhanced values for international media rights generating higher revenue for Premier League clubs.
“However, without further significant capital injections from owners, transfer spending is unlikely to exceed the record level achieved in 2008.”
Deloitte’s analysis shows Manchester City’s spending has been around 120 million pounds (136 million euros) representing 27 percent of the total spent, while Aston Villa, Liverpool, Sunderland and Tottenham have each spent more than 25 million pounds (28 million euros) on new players.
Rawnsley said the necessity of the owners of Manchester United and Liverpool to make big interest payments on loans taken out to buy the club have also had an impact.
He said: “Having to pay interest can have a bearing on transfer budgets but that is not necessarily why United have spent more of the Ronaldo money.
“Some clubs may well have felt that thanks to the spending of Real Madrid and others such as Manchester City the transfer market has been too inflated.”
LONDON (AFP)
Tags: 500 million pounds, Alonso, arsenal, aston villa, business group, capital injections, CITY, contributory factors, cristiano ronaldo, deloitte, earners, economic conditions, emmanuel adebayor, football finance, Liverpool, london, MADRID, Manchester, manchester city, Paul Rawnsley, premier league, premier league clubs, record sum, s sports, Spain, Sunderland, tax regime, top flight, tottenham, United, xabi alonsoRelated posts
Taxes, sterling ´cost Premier League in players race´
July 17, 2009
English Premier League clubs are losing the battle for top European stars as the exchange rate and tax rises clobber their projected income, auditors Deloitte said on Friday.
Continental European players could see their net income plunge by a third from April 2010, when Britain’s new 50-percent top rate of income tax takes force — up from 40 percent.
“As a result, players and their agents are likely to request pay increases to compensate them for this, leaving clubs with a choice between an increase in their wage bill or potentially losing the player to an overseas rival,” Deloitte said in a report.
According to research conducted by their Sports Business Group, Premier League clubs could face wage demands up to 70 percent higher than their rivals in Europe’s other top leagues: Spain, Italy, Germany and France.
If a player negotiating a new contract this pre-season demanded three million euros (4.2 million dollars) per annum after tax, the cost to a Premier League club following the income tax increase in April 2010 would be 6.8 million euros, Deloitte said.
That is 70 percent more than the four million euros it would cost a Spanish club to give a foreign player the same net pay.
The British figure is also higher than clubs in France (6.7 million euros), Italy (5.7 million euros) and Germany (5.4 million euros) would have to pay.
“The summer transfer window opened over a month ago, but Premier League clubs are yet to make significant acquisitions from overseas,” said Pete Hackleton, senior manager in the Sports Business Group.
“Real Madrid has already spent a reported 200 million euros on three players from other big European leagues — Cristiano Ronaldo, Kaka and Karim Benzema — but we have not yet seen a significant influx of talent to the Premier League.
“The reduced value of sterling against the euro and the proposed increase in the top rate of income tax are contributing factors to this.”
Spain’s La Liga first division is the main alternative to the Premier League for top talent, Deloitte said, thanks to its tax system which allows temporary non-Spanish residents to be taxed at 24 percent.
Britain’s 50 percent tax rate will apply to any annual income above 150,000 pounds (245,000 dollars, 175,000 euros) as the Treasury seeks to claw back lost tax revenue caused by a deep recession.
LONDON (AFP)
Tags: annum, Britain, business group, continental european, deloitte, English Premier League, Europe, european stars, France, france 6, Germany, income tax, increase, influx, Italy, kaka, Karim Benzema, LA Liga, london, losing the battle, MADRID, new contract, Pete Hackleton, plunge, premier league clubs, real madrid, ronaldo, Spain, spanish club, sports business, wage demandsRelated posts
Real sold 15 Ronaldo jerseys per minute – reports
July 8, 2009
MADRID (AFP) – Real Madrid sold 15 Cristiano Ronaldo jerseys per minute at the club’s shop at the Santiago Bernabeu stadium in the two hours that followed the player’s presentation on Monday, reports said Wednesday.
The shop sold 2,000 jerseys bearing the Portuguese striker’s name and the number nine once sported by club legend Alfredo di Stefano during the period at 85 euros (118 dollars) each for a total revenue of 170,000 euros, sports dailies AS and Marca reported.
In the rush, 300 black and white Ronaldo jerseys were stolen. The “Cristianomania” continued on Tuesday as the adult size jerseys were sold out at the shop.
Ronaldo, 24, did much better than Real’s other big name new recruit, Brazil’s Kaka, who joined the Spanish giants from AC Milan in early June for 65 million euros.
During the two hours that followed the 27-year-old’s presentation at the Bernabeu stadium on June 30, the shop sold 600 Kaka jerseys or five per minute.
Some 75,000 people turned out for the official unveiling of Ronaldo, compared to the 55,000 who turned out to welcome Kaka to Real.
Ronaldo joined Real from Manchester United in June on a six-year deal worth around 94 million euros and he will reportedly be paid 13 million euros each season, making him the most expensive player in the world.
In an interview published Wednesday in AS, the 2008 FIFA world player of the year said the amounts involved in his transfer were justified.
“Of course one can pay this sum for me. I think even more. They all say no, but I say yes,” he said.
Real is the world’s largest revenue-generating club in the world, ahead of Manchester United and Barcelona, according to an annual ranking compiled by business advisory firm Deloitte.
The club boosted revenues from sales of jerseys and other souvenirs after it began signing top world players like France’s Zinedine Zidane and England’s David Beckham in 2000.
Real Madrid’s capture of Brazilian star Kaka alone could be worth 100 million dollars a season in additional revenues to the Spanish club, according to sports business consultancy Weber Shandwick Sport.
Tags: ac milan, adult size, advisory firm, Alfredo, alfredo di stefano, Barcelona, brazil, cristiano ronaldo, dailies, David Beckham, deloitte, England, fifa world player, fifa world player of the year, France, kaka, LA Liga, MADRID, Manchester, manchester united, new recruit, number nine, real madrid, ronaldo, s david, Santiago, santiago bernabeu stadium, Stefano, United, world player of the year, Zidane, zinedine zidaneRelated posts
Premier League clubs defy economic downturn
June 4, 2009
LONDON (AFP) – England’s top-flight clubs will buck the economic downturn by continuing to increase revenues next season but rising levels of debt could signal trouble ahead, according to the annual review of football finances from accountancy group Deloitte.
Dan Jones, one of the authors of the report, said the Premier League’s global popularity would keep revenues rising but predicted that revenue growth would slow.
“The new economic realities may lead to flat matchday revenues,” Jones said. “While attendances continue to hold up well, many clubs have frozen or reduced ticket prices.
“However, the stepped increases in the current domestic broadcast deal and the new UEFA Champions League TV deal make it likely overall revenues will edge up.”
The accountancy group’s report – based on figures from the 2007/08 season – reveals that total debt among the 20 Premier League clubs hit 3.1 billion pounds in 2007/8 while wage costs surged 23 percent to reach 1.2 billion pounds.
Deloitte’s Alan Switzer warned that clubs could not afford to be complacent about the long-term sustainability of their debt levels given the possibility of failure on the pitch, an issue highlighted by Newcastle’s recent relegation.
“The more debt you have, the more vulnerable you can be if you suffer a revenue knock-off such as failing to qualify for the Champions League or in the worst scenario relegation,” Switzer said.
“Having a higher debt is not helpful in those situations and you have to make sure you have some flexibility, and that places an onus on having flexibility around player wages.”
Although wage costs have increased, increased television money ensured that the average wages-to-turnover ratio for Premier League clubs declined slightly (from 63 percent to 62 percent).
Manchester United and Arsenal both paid out less than 50 percent of their income in wages but Chelsea’s ratio was 81 percent.
The wages-to-revenue ratio is more of a concern in the second-tier Championship, where the average was 87 percent, with Hull City – who won promotion to the top flight in 2008 – on 124 percent.
Switzer added: “Lower revenue growth in forthcoming seasons means clubs will have to focus on improving cost control – both wages and other operating costs – if profits are to be maintained.”
Deloitte’s report also highlights the success of the Championship, which enjoyed the third highest average attendances of any league in Europe behind the Premier League and Germany’s Bundesliga.
Switzer said: “That can be overlooked sometimes and the Championship is a very competitive league.”
Deloitte’s report found that the top-flight clubs are more profitable than their rivals overseas, having been briefly eclipsed on that score by Germany’s elite.
It also identifies Italy’s Serie A as the fastest-growing league in financial terms, with total revenues increasing by 34 percent.
The Premier League said Deloitte’s report was an indication of the rude health of English football.
Spokesman Dan Johnson said: “Clearly debt has risen, but it is a more complex issue that many commentators assume. Clubs use different models of debt – investment, benefactor and acquisition – but ultimately it is for individual clubs to decide what levels they carry and whether it is sustainable.”
Tags: Alan Switzer, arsenal, average wages, broadcast deal, CHELSEA, Dan Jones, debt levels, deloitte, economic downturn, economic realities, England, English Premier League, Europe, football finances, Germany, global popularity, hull city, Italy, london, Manchester, manchester united, NEWCASTLE, onus, perce, player wages, premier league clubs, relegation, Spokesman Dan Johnson, switzer, term sustainability, top flight, turnover ratio, tv deal, UEFA Champions LeagueRelated posts
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