Quotes Of The Year, Part One Executive Transactions Names In The News Mayne-Nicholls: England Bid Was Best Tour Of Ireland Could Return In 2016 LTA Prize Funding Cut Sparks Fury Qatar Eyeing EPL Tottenham Hotspur Levski Sofia: Salaries 75% Of '15 Budget Subway Ramps Up Liverpool Sponsorship Wanda Emerges In Infront Media Auction
SBD Global/June 7, 2013/FinancePrint All
A study released by Deloitte showed the combined revenue of Premier League teams "will leap to more than" £3B ($4.6B) for the first time next season, according to Alex Duff of BLOOMBERG. In its Annual Review of Football Finance, Deloitte said that revenue will increase by about £600M ($935M), or almost 25%, from the '12-13 season "as income is boosted by the first year of new broadcasting deals." The report, which focuses on the '11-12 season, said that revenue rose 4% to a record of almost £2.4B in that year, "boosted by sponsorship deals" for ManU and Man City with Deutsche Post AG’s DHL and Etihad Airways. The league’s revenue "is estimated to have risen" a further 5% in the season just ended (BLOOMBERG, 6/5). The BBC reported the report said the cash, plus new spending rules, "could provide huge benefits to the long-term development" of football. Deloitte Sports Business Group Partner Dan Jones said, "Despite operating in a challenging economic environment, English club football's profile, exposure and increasingly global interest have continued to drive revenue growth for the top clubs" (BBC, 6/5). In London, James Riach reported total revenue for Championship clubs increased by £53M ($82M) to £476M ($742M). Although the combined operating losses for all 24 teams in the division rose to a record £147M ($229M), with a worrying total £900M ($1.4M) net debt, it "remains the strongest second-tier across Europe by some distance." Despite the impressive revenue growth, though, "operating losses in the Football League grew to record levels" (GUARDIAN, 6/5).
BUNDESLIGA'S BANKROLL: In London, Ashling O'Connor reported although there were two German clubs in the Champions League final, the Premier League "can still boast" a €1B ($1.3B) revenue lead on the Bundesliga, which is "the second biggest income generator" in the £15.7B ($24.5B) European football market. This gap "will only grow next season after the Premier League’s sale of its media rights" for a record £5.5B ($8.6B). The entrance of BT Sport to compete with BSkyB in the domestic market resulted in a 70% "surge in the value of the UK rights alone" (LONDON TIMES, 6/6). Also in London, Rebecca Clancy noted while the Premier League has the highest revenue of any in European football, Germany "remained Europe’s most profitable league as stricter licensing rules curbed clubs’ spending on player wages." Bundesliga clubs "had a combined equivalent" of £154M ($240M) of operating profit in '11-12, compared with £98M ($152M) for the Premier League. Deloitte added that the Bundesliga "will also enjoy a significant increase in revenue next season," due to their domestic broadcast deals, which are up roughly 50% (TELEGRAPH, 6/6).
RISING WAGES: In London, Roger Blitz reported Premier League wages "are projected to have risen" by 9% over the past season to a total of £1.8B ($2.8B), and will soon reach a level more than €1B ($1.3B) higher than the next highest-spending European league. The history of the Premier League "has seen clubs throw increased income at players’ wages in order to stay competitive in football’s biggest revenue-raising club competition." The coming season "is unlikely to be any different." Deloitte said it would take “unprecedented restraint” to reduce the ratio in the coming season (FINANCIAL TIMES, 6/6).
The Deloitte study also found:
- The lower revenue growth for La Liga and Serie A clubs is reflective of the challenging economic conditions in these countries. La Liga remains highly polarized, with €1B of '11-12 revenues relating to Real Madrid and Barcelona, exacerbated by their ability to sell their own broadcast rights.
- Italian clubs continue to be most heavily reliant on broadcast revenue, which contributes 59% of their total revenues. Already relatively weak matchday revenues declined further and contribute just 12% of Serie A clubs' overall revenues. Juventus bucked this trend.
- Russia has the next highest revenue generating top tier league followed by Turkey and the Netherlands (Deloitte).
Golf "first began at least 500 years ago as a sport for gentlemen on the links lands of Scotland," according to Frank Urquhart of the SCOTSMAN. New research conducted by KPMG in association with Oxford Economics said that the Royal and Ancient Game is now worth a staggering £1B ($1.56B) a year to the home of golf. The "Value of Golf to Scotland’s Economy" report was published Wednesday at the start of the two-day Golf Business Forum organized by KPMG in St. Andrews. It shows that the industry now generates a total of £1.2B ($1.8B) in revenues and employs more than 20,000 people in Scotland -- accounting for one in every 125 jobs in the country. Wages alone total £300M ($468M). There are "now 597 golf courses across the country, supporting more than 12,300 jobs" and generating annual revenues of £582M ($908M), with at least eight golf course projects currently in the planning and development phases. Sales of golf equipment, clothing and accessories are worth a further £157M ($245M) a year, supporting 1,660 jobs, while golf tourism is worth at least £120M ($187M) to Scotland’s economy (SCOTSMAN, 6/5).
DRIVING FORCE: In Glasgow, David Ross reported the research concludes that "once costs are taken into account, golf directly contributes" £496M ($773M) to Scotland's gross domestic product (GDP) annually, "equivalent to 0.4% of the country's total economic output." Scottish Golf Union CEO Hamish Grey said, "This report clearly demonstrates the significant value of golf to Scotland's economy. Comparing it to other industries, we can now see for the first time that, for example, golf's direct contribution to GDP is 89% that of fishing and fish farming, and 83% of air transport" (HERALD SCOTLAND, 6/5).
Spanish Football League (LFP) President Javier Tebas will on Friday present to league clubs his proposal to lower his own salary, according to Javier Hernandez of AS. Tebas will do so at Friday's Extraordinary General Assembly. In this way, "Tebas will live up to one of the promises he made after being elected LFP president, a popular measure related to Spain's current economic situation." The clubs will "vote whether to accept his offer." The main theme of the meeting, though, will be the approval of La Liga and The Second Divisions' '13-14 schedules. There will "be changes and compromise from this season because of the 2014 Brazil World Cup" (AS, 6/5).
DEPORTIVO BEGINS LIQUIDATION: In Madrid, Sara Massa wrote Spanish second division side Deportivo La Coruña has been relegated from La Liga just one season after securing promotion by winning the second division. The club "is facing many problems, economically above all." Club President Augusto César Lendoiro has assured that his team will remain viable despite relegation, but "with the club in administration, Deportivo will have to adjust its budget, starting from zero with the roster and supporting itself with its best asset -- its fan base." Deportivo's exact budget for next season "remains unknown," but the club recognizes there will be a "drastic reduction." Bankruptcy Law will "force Deportivo to rebuild the team from the bottom 'to fight to be in a position for promotion.'" The club's coach, Fernando Vásquez, "is known for getting the best performance from low-level rosters and as a connoisseur of youth talent, two essential characteristics for the new Deportivo." In total, 14 players have contracts that are ending (EL CONFIDENCIAL, 6/6).
Real Madrid has opened its period for season ticket renewals with "an important new change for its fans and season-ticket holders," according to Carlos M. Sánchez of EL CONFIDENCIAL. Through June 21, fans buying tickets will be able to finance payments without paying interest as part of an "important aid for fans through an agreement reached with BBVA" bank. BBVA will allow those buying tickets to request a "Real Madrid-BBVA" card to finance payments over three, six or 10 months, with each of these plans available without interest. The bank will also offer insurance for ATM thefts or accidents. Real Madrid President Florentino Pérez has reached this agreement to "ease his fan base's continued loyalty as fans and season-ticket holders." Real Madrid "is aware of the country's economic circumstances and financing without interest is a more comfortable option for fans that want to continue their connections to the club" (EL CONFIDENCIAL, 6/6).
Puma has committed itself to the Bangladesh Fire and Safety Agreement and pledges to ensure that its affiliated factories observe the highest standards of fire protection and safety. The agreement was initiated by global trade union Industry All (ISPO). ... Portuguese football side Sporting Dir General Alfredo García Amado recognized Wednesday that the club has an "important treasury problem," with a current debt of more than €30M ($39.2M), but denied that there is a risk of folding (EFE, 6/5).