Revenue still rules in football
It’s a been a rather tempestuous week for the sporting empire of Sir Jim Ratcliffe. Following a 3-1 home defeat to Brighton last weekend, Manchester United manager Ruben Amorim labelled his team “the worst” in the club’s history. United now sit 13th in the Premier League, closer to relegation than the Champions League.
Amorim’s appointment was a key moment in Ratcliffe’s stewardship of the club. Since buying a minority stake last year, the UK chemicals billionaire has overseen a mass clearout of senior executives and cut headcount by 250 people. This is now his operation, and things are not going to plan.
His sailing operation has also run into choppy waters. On Thursday, Ineos announced that its America’s Cup team was parting ways with legendary British sailor Sir Ben Ainslie after failing to “find agreement on terms to move forward”. Ainslie responded soon after, saying he was “astounded” and threatened legal action.
Having built a sprawling sports business that also includes interests in Formula One, cycling and rugby, it looks like Ineos and Ratcliffe will be battling on several fronts in the coming weeks and months.
This week we’re having a look at the financial picture among European football’s top clubs, and run through the numbers at DAZN after another year of heavy losses. Do read on — Josh Noble, sports editor
VIPs and sponsors power growth for football elite
It’s that time of the year when Deloitte releases its annual appraisal of the elite football business, and the headline figures look pretty rosy.
The main takeaways from the 2023/24 season are quite straightforward: match day income is where the growth is, while for several top teams commercial revenue has become more important than TV money. Total revenue across the richest 30 clubs in football rose 6 per cent to a new record. So far, so good.
Real Madrid, ranked top in the wealth rich list again, became the first club to breach €1bn in annual revenue. Match day income more than doubled last season to €248mn, thanks in large part to the €1.3bn revamp of the Santiago Bernabéu. Aside from adding seats, the renovation has increased the club’s premium hospitality offering, and opened up a range of non-football events — from NFL games to Taylor Swifts concerts. Many others are trying to follow suit.
Real’s commercial income surged to €482mn, compared to €316mn for broadcast, helping the club achieve topline revenue growth of 26 per cent.
Several other teams booked big jumps in revenue too, with Arsenal, Newcastle and Aston Villa all enjoying steep increases.
But, as always with the Deloitte report, there’s one key metric missing from the data: profits. Even after breaking the €1bn mark, Real managed to eke out a profit of just €15.6mn — and that’s excluding any spending related to the stadium.
City, ranked second in the Money League, also booked profits, but made a loss on an operational basis. United made record losses of £113mn, and a number of others are expected to do the same when they report in the coming weeks. Football is great at earning money, but even better at spending it.
Perhaps none of that matters. Football finance regulation is undergoing a shift — moving from a model that punishes losses to one that, in effect, rewards revenue. So juicing income is, for now, the name of the game. Investors see football as a valuation play, and asking prices are still based on revenue not profit.
But at some point, you have to think, would-be owners will start asking more pointed questions about what a successful business model looks like.