How has the global economic crisis hit the Beautiful Game?

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Real Madrid have topped the league table of the world’s Richest football clubs for the fifth straight year, according to Deloitte’s sport unit.
Its Football Money League, based on data for season 2008/09, also says Real are the first global sports team to see annual revenues top 400m euros (£357m).
Real’s arch-rivals Barcelona have taken second sport in the list, ahead of Manchester United who drop to third.

1) Real Madrid: 401.4m euros
2) Barcelona: 365.9m euros
3) Man Utd: 327m euros
4) Bayern Munich: 289.5m euros
5) Arsenal: 263m euros
6) Chelsea: 242.3m
7) Liverpool: 217m euros
8) Juventus: 202.3m euros
9) Inter Milan 196.5m euros
10) AC Milan: 196.5.m euros

The authors said that United would have been top of the Money League if the pound was still at June 2007 levels.
But they point out that, despite exchange rate issues, seven of the top 20 in its table are from England, the other three being Tottenham (15th), Manchester City(19th), and relegated club Newcastle United (20th).
All the 20 clubs represented are from the “big five” European leagues, with Germany contributing five clubs, Italy four, and France and Spain two each.
‘Challenges’
Real retained top position despite a disappointing season, coming second in La Liga and exiting the Champions League at the Round of 16 stage.
But they were boosted by a much-improved television contract with Mediapro, guaranteeing the club more than 1.1bn euros over seven seasons.
Arch-rivals Barcelona had a hugely successful season, winning La Liga and the Champions League – beating Manchester United, who won the English Premier League in 2008/09, in the final.
“We continue to assert that the game’s top clubs are well placed to meet the challenges presented by the difficult economic environment,” said Deloitte’s Dan Jones, who compiled the report.
“Their large and loyal supporter bases, ability to drive broadcast audiences, and continuing attraction to corporate partners, provide a strong base to underpin revenues.”

However, there were warnings that many clubs now face “increased pressure on ticket pricing strategies and all clubs will continue to face challenges in managing match day” returns.
And the report also points out that the current season, 2009/10, will offer clarification about whether the global recession has had a major impact on clubs’ revenues.
The Deloitte review does not include the cost of transfer fees or player wages, or VAT and other sales taxes, and concentrates solely on day-to-day income from football business.
Income includes money from ticket sales, sponsorship, merchandising and other commercial revenues, television monies, corporate hospitality, and non-match day stadium use such as for conferences.
The list had been headed by Manchester United for eight years until Real Madrid deposed them. (BBC Sport)

Considering the global downturn is still very much affecting every aspect of daily life it is perhaps a tad surprising that football clubs are still posting such large numbers and perhaps it is a sign that some forms of entertainment are still managing to pull in the punters regardless of the recession we are all experiencing.

These figures would appear to show the likes of Real Madrid are making large sums of money from the game but it is worth repeating the fact that these figures do not include money used to buy players and clearly given the large sums used by all the teams on this list and therefore is a slightly skewed way of valuing the profits made by these clubs.

The Premier League continues to show an overall dominance and it is the fact that television revenue has increased that has helped generate the necessary funds for the English top tier sides to be able to spend big on new additions. These figures will not however dispel the belief that the game is in many ways spending beyond its means and the fact that the first Premier League club to enter administration, Portsmouth, still illustrates the precarious nature of the game even at the highest level and it is easy to see that with the big money all concentrated at the top end of the biggest leagues across Europe there will be even more pressure on those outside the promised land of the top divisions to attempt to buy there way into the big time.

Above all else the continued ability of the big five leagues to be sold across the world to TV networks has been the real bonus in an age when attendances have stayed pretty much as they have been for the past five years. This added revenue from TV revenue has been the driving factor for financial progress.

Arguments to reign in overspending are still as valid as ever and whilst this report from Deloitte implies that there is still a great deal of money within the game it is as clear as crystal that only sensible running of the club’s as businesses will help see football through the current financial climate. Teams such as Arsenal, with their strict wage ceilings and insistence on not breaking the bank on transfer fees, are setting the benchmark for the future, whereas mismanagement, such as that shown at Liverpool and Man United, could end up crippling teams that had previously appeared unbreakable.

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