European teams, +€ 7 Bn poorer in two years

UEFA, the body that regulates European football, has been publishing a wide-ranging study of the economic situation of European football for years. The analysis includes more than 700 European football teams, which play in the first division, in 55 countries.

Sports Value studies European football's finances with data since the 1990s and today's our newsletter edition will show the heavy impacts of the pandemic on football's finances in Europe.

COVID-19 severely impacted the football world.

Revenues x Wage Costs- Top tier European football teams - € Bn

2019, year of all records

The pandemic was negative for clubs′ finances, And 2019 was a historic year for European football, as revenues reached €23.0 Bn for the first time. Wage expenses that always track revenue growth reached € 14.7 Bn or 64% of total revenue.

Matchday revenues- 2019- € M

Matchday revenues from European teams in 2019 were €3.3 Bn and accounting for 14% of the total. ?The biggest were Barcelona, Real Madrid and Manchester United. ?

A great example before pandemic was PSG, which with a much smaller stadium grew much in revenues. French team had been presenting the largest average revenues per attendee in world football, more than € 92 per fan, and French League has on average € 22.

Pandemic cut more than €7 Bn in revenue

UEFA projections show that the revenue cut may have been worse than originally projected. The most optimistic analysis shows revenue cuts in two seasons (2019-20 and 2020-21), € 7.3 Bn, however can be € 8.1 Bn.

Empty stadiums alone were more than €4 Bnn reductions, there were cuts of more than € 1.2 Bn in broadcast rights and €2.4 Bn in commercial income Total revenue projections for 2021 are € 15 Bn or € 16 Bn, for this top tier teams.

Annual wage bill - First Division League- 2019- € Bn

Wage spending, on the other hand, did not follow the same pace of revenue cuts. On average, contracts last for 28 months.

The total commitment in payroll costs by the teams is € 34 Bn. The reduction in wage costs in these two years was € 1 bn. Now they are €13.7 Bn, now 87% of total revenues.

The reduction in revenues from transfers during the pandemic further deepened the financial teams ′situation. The cuts of international players ‘transfers were 34% in those two years.

Losses were astronomical

European teams presented huge and even unimaginable losses. Here seven exemples: Barcelona, Roma, Internazionale, Milan, Arsenal Totenham and Manchester United, and they accumulated losses of € 2 Bn in two years.

Barcelona ended 2021 with net losses of €481 M. In two years, the losses were € 582 M. Few years ago reached € 1 Bn in revenues, with Neymar transfer.

Net Losses in 2 years- (2020 & 2021) € M

The pandemic impacted the financial situation of teams that were financially leveraged and failed to quickly rebalance their finances amid the chaos. Income reductions from games were brutal.

Matchday Revenues- 2019-2020-2021- € M

New revenues in digital did not keep up with losses with stadiums and other income.

Real Madrid offered a management class

Real Madrid, a football giant suffered strong impacts with COVID-19. His solid management has shown that it is possible to balance finances, even in the pandemic.

Revenues from the stadium went from €145M in 2019 to just €10 million in 2021. It still ended the season with net income.

Club balanced the matchday revenues cuts, with an improvement in TV, commercial and UEFA revenues, TV and marketing brought €71M new.

Club reduced important costs such as wages and other operating costs. €69M less. In addition, it earned € 106M in players′ transfers, in 2020 it was €101M.?

Total revenue fell from €715M in 2020 to €653M in 2021, -9%.?Costs fell from €665M to €596M, -10%. Net profit increased from €300K to €900K

A global showcase!

Focus on women can accelerate revenues growth

This week we celebrate International Women's Day, and Sports Value defends that women as consumers and sports practitioners can help in the growth of the sports industry,

Here we talked more about this issue.

Women can profoundly increase the business associated with football and sport in general.

Digital world will balance finance dropped

New digital revenues are the solution, but much more than just surfing the digital assets hype, the big move is to control revenues, generate recurrence and mainly connect digital strategies with the teams′ own contents.

There are so many possibilities in digital revenues, but today are being monetized by social networks. European football giants contribute a lot to the profits of Face/Insta, Twitter and YouTube. And now Tik Tok.

Exclusive content is gold, but clubs haven't been able to monetize yet. Structuring the digital business model is as important as the content created itself.?