€68 mln for Kaka
The European football market grew by €1 bln to €14.6 bln in 2007/08. This was primarily due to a €0.7 bln increase in the ‘big five’ European leagues’ revenues to €7.7 bln and the staging of UEFA Euro 2008.
New improved broadcasting deals strengthened the English Premier League’s position as the highest revenue generating league in world football. Its clubs generated revenues of €2.4 bln in 2007/08 (up 26% in Sterling terms), extending the gap to its nearest rivals to more than €1 bln, despite Sterling’s 15% depreciation against the Euro.
“The continuing revenue growth of Real Madrid and Barcelona, the world’s highest and third highest revenue generating football clubs respectively, helped La Liga to draw level with the Bundesliga in the close battle for second place (both €1.44 bln), with Serie A only marginally behind (€1.42 bln),” explained Dan Jones, Partner in the Sports Business Group at Deloitte. “We expect Barcelona’s victory in the UEFA Champions League to have contributed to La Liga taking second place on its own in 2008/09.”
La Liga enjoyed revenue growth of €112 mln (8%) placing it in joint second place with the Bundesliga. Real Madrid and Barcelona contributed 47% of the total league revenue emphasising the financial polarisation in La Liga. Wages went up 8% to €900 mln.
In a sign of football’s resilience to the economic downturn, Deloitte expects Europe’s top clubs will continue to grow revenues in 2008/09 and 2009/10, albeit at a slower pace.
“The acid test will come in 2009/10 when season ticket and sponsorship renewals in particular will underpin revenue performance,” Jones added. “However, it is encouraging that total 2008/09 attendances across the leagues increased by 2%. The Bundesliga, Ligue 1 and the Premier League and the major clubs in La Liga also have secure long term broadcasting deals in place which deliver significant proportions of total revenue. The greatest challenge may come in maintaining commercial revenues and higher priced corporate hospitality ticketing, while also addressing wage and cost inflation.”
The majority of the increased revenue in 2007/08 has been spent on player wages and transfers. Wage costs for the ‘big five’ leagues increased by €588 mln (14%) to €4.8 bln.
Serie A achieved the largest absolute and relative revenue growth of the ‘big 5’ in 2007/08, with revenue increasing by €357 mln (34%) to €1.42 bln – assisted by the return of Juventus to the top league. Wages increased by €250 mln (35%) to €972 mln.
Bundesliga revenues increased by €59 mln (4%) to €1.44 bln in 2007/08, boosted by commercial and matchday revenue growth. The Bundesliga remains the best attended of the ‘big five’ leagues with average league matchday attendances of 42,600 in 2008/09 – the highest since it was formed in 1963.
The Scottish Premier League clubs experienced revenue growth of 14%, in Sterling terms, to €252 mln, partially as a result of Celtic and Rangers competing in the Champions League group stage in 2007/08 and Rangers reaching the UEFA Cup Final.
The Premier League returned record profits of €234 mln in 2007/08, and reclaimed its position as the most profitable league, from the Bundesliga (€136 mln) which it lost temporarily in 2006/07.
France’s Ligue 1 joined Serie A in recording operating losses.
€68 mln for Kaka
Real Madrid signed Brazilian midfielder Kaka from AC Milan for 68 mln euros, the second biggest ever after Zinedine Zidane joined Real from Juventus for 73 mln euros in 2001.
The 27-year-old international has agreed to a six-year contract to become the first player to join Real since Florentino Perez returned to the presidency and promised to deliver a "spectacular sporting project" built around the world's greatest players, in a 300 mln euro war chest which will be used to finance a second 'Galactico era' at the Bernabeu.
Perez is also interested in Manchester United's Cristiano Ronaldo, Bayern Munich's Franck Ribery, Liverpool's Xabi Alonso and Valencia duo David Villa and David Silva.
New coach Manuel Pellegrini is the man tasked with blending these talents into a team capable of challenging treble-winners Barcelona.
