Last week, UEFA, presented its annual Club Licensing Benchmark Report,
which analyses socio-economic trends in European club football. The report is
relevant in regard to the FFP rules, as it has been hailed by UEFA as a
vindication of the early (positive) impact of FFP. This blog post is a report
on the report. We go back in time, analysing the last 5 UEFA Benchmarking
Reports, to provide a dynamic account of the reports findings. Indeed, the 2012
Benchmarking Report, can be better grasped in this context and longer-lasting
trends be identified.
Club Licensing and FFP Regulations Enforcement
For the footballing season 2013/14 seven clubs from five different
countries had been excluded from European competition due to FFP (including
Malaga, Rayo Vallecano and CSKA Sofia). Since 2004, 42 sanctions were handed
out to 40 clubs (FC Irtysh from Kazakhstan and Bulgarian club CSKA Sofia have
been sanctioned twice) spread over 21 different countries. Clubs from
Kazakhstan have received most sanctions: seven in total.
economics of transfers
Over the last five years, €10.9 billion were spent on transfers by the European
clubs. €8.4 billion were spend by clubs in the English, Italian, Spanish,
German and Russian leagues.
The summer of 2013 saw a record of €3 billion being spend by European
clubs on the transfers of players, 12% more than the previous record which was
set in the summer of 2011.
In the last five years 166 players were transferred for €15 million or
more, 63 were transferred to English clubs. Number two, Italy, bought 26, less
The revenue for top division clubs was €14.1 billion in 2012, which is an
increase of €800 million compared to 2011.
Total revenue has gone up for all six top divisions over the last five
years. England had a total revenue of €2.44 billion in 2008 and a total revenue
of €2.78 billion in 2012, an increase of 12.23%.
The biggest change is witnessed in Russia where revenue increased from
€350 million in 2008 to €890 million in 2012. An increase of about 150%!
Compared to 2011, the domestic broadcasting revenue increased by 8% and
the commercial & sponsor revenues increased by a combined 7% and is
expected to continue. Nonetheless, gate receipts fell by 2%.
Player wages amounted to €9.2 billion in in 2012, an increase of €600
million compared to 2011, and €2.1 billion compared to 2008.
The last five years have seen a significant increase of wages namely 59%
over the whole of Europe. In the top divisions a wage increase of 49% can be
witnessed. The wage to revenue ratio is stabilised at 65%, the same percentage
as in previous years, but differs from country to country
Out of the 50 clubs with the highest wage bills 15 were English, 8
German, 8 Italian, 6 Spanish, 6 Russian and 5 French.
Interestingly, in 56% of the time, the club with the highest wage bill
in that particular division won the league. (In the 20 wealthiest leagues this
percentage is 60%). The main exception is AC Milan, who has the highest wage
bill in Italy, but has only won the league once in the last decade (2010/11).
In 21% of the time, the club with the second highest wage bill in that
particular division won the league.
base and profits/losses
The total top division club losses was found to be €1.1 billion in 2012,
which is equivalent to an 8% loss margin. Even though the clubs still made
losses, the final number is €600 million less compared to the €1.7 billion in
2011. 57% of all clubs reported losses, however, 58% of the clubs produced
better numbers (higher profits or lower losses) than in 2011.
Do note that the net profit/loss after tax is not the same as the
break-even result assessed for FFP purposes. For example, youth costs may be
excluded for the break-even assessment but not for the net profit/loss
Only six of the 20 highest income leagues reported profits in 2012,
namely the German, Dutch, Belgian, Austrian, Norwegian and Kazakh leagues. In
total 38 out of 53 European leagues reported losses.