Football generates a lot of money, but it also spends freely and goes into debt beyond its means. The Association of Economists of Catalonia presented this Wednesday a study that analyzes the financial state of the five major European leagues – the English Premier League, the German Bundesliga, the Spanish League, the Italian Serie A and the French Ligue 1 – with data from the 2022/2023 season. The result is similar in all competitions: the leagues increase their income year after year, hand in hand with the big clubs, which monopolize the majority of resources due to the commercial pull and partly due to the inequality generated by the income from participating in the competitions. Uefa competitions. But this increase in turnover does not translate into a healthy balance sheet: in all leagues, except the German one, which is the most prudent, income is lower than the enormous and chronic debt they carry. The solution? Clubs look for it in extraordinary results: sale of players, rights and levers that keep them alive and with the ability to continue investing and competing.
The report analyzes how the turnover of European football has evolved. Between the 2013/2014 and 2022/2023 seasons – the last one for which complete and comparable data is available – European football revenues have gone from €21.3 billion to €35.3 billion. If we focus only on the five major leagues, these have gone from 11.3 billion to 19.6 billion (the rest are the other European leagues, FIFA, UEFA and the federations). Only the pandemic brought a stop to this increase in income. Among the five major leagues, the Premier is far above the others: In the 22/23 season it obtained revenues of almost 7,000 million, while the others were between approximately 2,400 and 3,800 million. The Spanish League had a turnover of 3,535 million that season.
But this large amount of money billed actually depends on a few clubs. The sales of the 20 most important football clubs in these five major European leagues grew by 16% in just one year—in which the Qatar World Cup was also played—and together these teams generated 55% of the total income. of the leagues. In the Spanish case, only Real Madrid and FC Barcelona contribute half of La Liga’s income. Their income also grew: 15.5% in the case of Madrid and 26.1% in the case of Barça. Tottenham and Atlético de Madrid are the only ones that did not grow in income.
Where does this income come from? In general, the most important item of income for clubs is television rights. But in the case of the 20 largest clubs in Europe, this is changing: the commercial part (merchandising and others related to the brand) already represents 46% of the income of these large clubs, while sports rights represent 38%. % and match tickets 16%. Furthermore, these big clubs are the ones that receive the most resources for participating in UEFA competitions. These 20 teams received 1,637.6 million euros from UEFA, 59% of everything this entity distributed that season. “And what really makes money is the Champions League, which guarantees a fixed income to the clubs just for qualifying,” point out José Sanfeliu and Martí Garcia Pons, authors of the study.
Unsustainable model
But as in any company, income alone does not explain anything. The volume of spending by the big leagues, and especially the big clubs, has grown even more, and this has given rise to a situation of great debt. “The common denominator is the excessive debt of all the major leagues. They are technically failed, it is a worrying situation,” say the authors of the report. In the Premier, 81% of the assets are financed with a debt that reached 11,916 million euros in the 22/23 season; in La Liga, the joint debt reached 7,688 million and financed 87% of the assets; In Serie A the debt was 91%, 73% in Ligue 1 and 60% in the Bundesliga.
“Therefore, the ability to finance assets with own funds or capitalization is decreasing. The Germans are the most prudent, but in the seasons following the one analyzed their level of debt has been increasing,” point out the authors, who point out three causes of the high debt: “Oversized investment, lack of capitalization and carryover of losses in several years ”. The authors highlight the difference between the Premier, where assets are 14,661 million euros, and the Bundesliga, where they are only 4,040 million. In the German league there are only two clubs that have a negative net worth, and in the English league, there are seven. In the Spanish league that season there were three clubs with negative net worth: Barcelona, Betis and Valladolid. And the only club in which equity was above debt was Athletic Club de Bilbao. “One positive thing is that in general Spanish debt is long-term,” the authors admit. Madrid and Barça contribute 60% of La Liga’s total debt.
All leagues, and most clubs, spend more than they earn. Personnel expenses and amortization expenses for signed players are the main items. To correct it, they have extraordinary income. “The model, to be sustainable, would not have to be like this, but everyone does it,” point out Sanfeliu and Garcia. After the extraordinary result (which includes sales of players, sales of rights, levers, and others), and taxes, in the Spanish league in the 22/23 season there were 11 clubs that showed a positive result for the year. But this is a result that does not reflect a healthy balance sheet, and the authors have warned of the risk: “The debt is chronic, because in no case does the cash flow exceed it, and only in the case of the Bundesliga were higher incomes recorded than debt”.
To top it all off, the study has given the example of FC Barcelona, a club that has had to apply levers – future sale of part of the television rights, among other things – to be able to continue investing and signing. “In recent seasons, the net worth is negative, it has more debt than assets, and the great challenge is knowing how to generate additional income to cope with it,” they point out.
