Many Americans might disagree on this one, but soccer is the world’s most popular sport. A recent study by Deloitte shows it is also good business.
“2011/12 represented another strong year of revenue growth for the Game’s elite clubs, with the top 20 Money League clubs generating over €4.8 billion ($6.41 billion) in 2011/12, a 10% increase on the previous year,” states the study released Jan. 24.
According to the study, the 20 biggest clubs represent roughly one-quarter of the total European soccer (football) market, which accordingly totals $25.6 billion. This is very large compared to the Business Insider estimate of $9.5 billion for 2012 NFL revenue, the highest revenue league in North America.
In terms of revenue per team, soccer can only compare when looking at the top 20 biggest clubs, however. Their revenue on average is $321 million each, compared to $297 million on average for each of the 32 NFL teams. The soccer club average is bound to drop if the hundreds of teams represented in European soccer comprising the $25.6 billion total are taken into account.
“The fact that [soccer’s] top 20 earning clubs contribute over one-quarter of the total revenues of the European [soccer] market gives an indication of the sport’s financial polarity,” states the study, indicating that most clubs in Europe generate very little revenue, unlike in the NFL.
Broadcasting Revenue Distribution Differs
Virtually all of the soccer clubs generate their revenues through three different channels. The first one is broadcasting.
Spanish club Real Madrid, for example, which topped the “Money League” this year, made 199 million euros ($266 million) of its 513 million euros ($686 million) total from broadcasting rights. FC Barcelona, which was in second place with total revenues of $645 million, received $240 million for broadcasting. The two clubs gained more money from broadcasting than any other clubs in Europe.
The large revenue stream from broadcasting for those two clubs stems from the fact that rights in Spain are sold on an individual basis and the two most popular clubs regularly receive the majority of the revenue. On the flip side, this means that no other Spanish clubs made the Top 20 this year.
On the whole, the English Premier League generates the most revenue from broadcasting but distributes it more equitably. A new deal coming into effect at the start of the new season in the summer of 2013 will bring the 20 clubs of the English top flight $1.58 billion per year.
Other than domestic broadcasting rights, the clubs make a lot of money from going far in the UEFA Champions League competition. The tournament sees the 32 best teams in Europe compete in a format similar to the world cup, with England’s FC Chelsea winning it in 2012.
“This victorious campaign was worth £48.5m ($76.6 million) in UEFA distributions, a $20.6 million increase from the previous season’s quarterfinal effort,” states the study.
Sponsorship and Merchandising Key for German Clubs
Despite finishing second place in the Champions League and receiving $59 million in broadcasting money from the UEFA, Bayern Munich’s total revenues from broadcasting were only $109 million last year, much lower than that of Spanish or English top clubs.
The reason is that the overall pie of domestic broadcasting money is much smaller in Germany, and the distribution system is completely equitable, with each club receiving the same share, regardless of sporting performance.
“In terms of quantum, the broadcast revenues generated by Germany’s top flight are far less than those of the Premier League,” states Deloitte.
Being the most popular club in Germany, Bayern can capitalize on the strength of the German economy and make up some ground through merchandizing and sponsorship deals, lifting it to fourth place in the overall European club ranking, behind Real Madrid, FC Barcelona, and Manchester United. Its total commercial revenue was $270 million, higher than any other revenue stream at any other club.
For the other top ranked German clubs, Schalke 04, Borussia Dortmund, and Hamburger SV, commercial revenues also accounted for 53 percent, 51 percent, and 48 percent of revenue, respectively.
The Epoch Times publishes in 35 countries and in 21 languages. Subscribe to our e-newsletter.
Friends Read Free