The winners and losers in the race for football revenues

Here are the total revenues of the top 20 clubs in Europe from 2010, 2008 and 2005. Looking at these, we can see which clubs have prospered and which clubs have floundered over the past 5 years.

Why is revenue important? It is this figure (after costs) that will determine how much a club is able to spend when the FIFA fair play rules take effect in 2013. Since it is impossible to determine exactly how much a club’s cost are, the revenue is the best thing we have.

Total Revenue (£m)
2010 2008 2005
1 R. Madrid 438.6 R. Madrid 365.8 R. Madrid 275.7
2 Barcelona 398.1 Man Utd. 324.8 Man Utd. 246.4
3 Man Utd. 349.8 Barcelona 308.8 Milan 234
4 Bayern 323 Bayern 295.3 Juventus 229
5 Arsenal 274.1 Chelsea 268.9 Chelsea 207.9
6 Chelsea 255.9 Arsenal 264 Barcelona 189.5
7 Milan 235.8 Liverpool 210.9 Bayern 189.5
8 Liverpool 225.3 Milan 209.5 Liverpool 181.2
9 Inter 224.8 Roma 175.4 Inter 177.2
10 Juventus 205 Inter 172.9 Arsenal 171.3
11 Man City 152.8 Juventus 167.5 Roma 131.8
12 Tottenham 146.3 Lyon 155.7 Newcastle 128.9
13 Hamburg 146.2 Schalke 148.4 Tottenham 104.5
14 Lyon 146.1 Tottenham 145 Schalke 97.5
15 Marseille 141.1 Hamburg 127.9 Lyon 92.9
16 Schalke 139.8 Marseille 126.8 Celtic 92.7
17 Atlético 124.5 Newcastle 125.6 Man City 90.1
18 Roma 122.7 Stuttgart 111.5 Everton 88.8
19 Stuttgart 114.8 Fenerbahçe 111.3 Valencia 84.6
20 Aston Villa 109.4 Man City 104 Lazio 83.1

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There are many talking points on these stats. Spanish clubs have now established themselves at the top. On the other hand, Italian clubs seem to be sinking. It is also interesting to note the rise of Arsenal, Manchester City and Tottenham.

The death of Italian football?

Despite Inter’s Champions League success last year, and Milan’s in 2006/07, there seems to be a growing opinion that Italian football is dying. In 2005, three Italian clubs were in the top 7 for total revenue, now there is just one. It appears that English clubs have overtaken them. Furthermore, Serie A crowds are, on average, the lowest of the four biggest Leagues in Europe, and the match-day revenues of Milan, Inter and Juventus reflect this.

Match-day Revenue (£m) 2005 2010
Milan 25.7 25.7
Inter 24.1 31.6
Juventus 15.4 13.8

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Looking at match-day revenue in 2005, it is clear that Italian clubs have not substantially increased their revenue from match-days. Juventus now make less than they did in 2005 and Milan have been unable to increase their match-day revenue in 5 years, while Inter’s success in the Champions League has only contributed to a slight increase. As a whole, the match-day revenue of top Italian clubs is ominously lower than in Spain, Germany or England.

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The best sides in England, on the other hand, have all increased their match day revenue significantly.

Match-day Revenue (£m) 2005 2010
Man Utd 69.3 100.2
Chelsea 55.6 67.2
Arsenal 37.4 93.9

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This dramatic increase in match-day revenue of English clubs has meant they have overtaken their Italian counterparts. Furthermore, Italian clubs stagnation of match-day revenue has been met by a small % increase in commercial deals, when compared to Man Utd, Chelsea and Arsenal.

Commercial Revenue (£m) 2005 2010 % increase
Milan 39.1 51.9 33
Inter 25.9 39.6 53
Juventus 55.5 45.5 -18

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Commercial Revenue (£m) 2005 2010 % increase
Man Utd 48.7 81.4 67
Chelsea 37.2 56.3 51
Arsenal 29.7 44 48

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In the past, Juventus have benefited from having a lucrative TV deal, but now this is not enough to keep their ‘total revenue’ as high as the likes of Arsenal or Chelsea. Their commercial revenue and match-day revenue is not competitive. Inter, the most successful of the Italian clubs, may have increased their commercial revenue by 53%, but even so their revenue (£39.6m) is still lower than the top 3 English clubs.

Sadly for Italian fans, the future shows no signs of improving. Italian clubs have always been able to generate large TV broadcasting deals because they organise them privately. However, in the season 2010/11, Serie A will adopt a distribution scheme similar to that of the Premier League. The result will be that the Italian giants will generate significantly less TV revenue and therefore total revenue.

It would not be surprising if in the future Italian success in Europe became less and less common. The biggest Italian clubs will no longer be able to compete with others in Europe financially. When the Fair Play rules take place in 2013 big Italian clubs could be hit as hard as anyone. They may be finding hard to compete at the moment, but their task is about to get much, much harder.

Arsenal, a perfect model for the future?

Arsenal, at the other end of the spectrum, are one of the few Premier League clubs who break even. Furthermore, they have climbed 5 places in 5 years and now generate more total revenue than Chelsea. This is largely due to their new stadium, The Emirates. Arsenal have increased their match day income from £37.4m in 2005 to just under £100m in 2010.

Breaking even though, is not just about increased revenue, it is also reliant on low costs. This is something Arsenal lead the way in. Arsenal have not spent a lot of money on new signings in the last 5 years. They have prefered to develop players rather the buying the ‘finished article’. This means both their transfer fees and wages are low.

In the last three years Arsenal have signed a few higher profile players but they have hardly ever bought from top flight European clubs. This is the major reason they do not run at a loss. The likes of Nasri, Arshavin and Vermaelen neither cost as much, nor ask for as inflated wages as players like Yaya Toure or David Silva.

However, Arsenal are not in a perfect position. In the last 5 seasons, Arsenal’s on-pitch performances have been consistently good, but not excellent. They have finish in 3rd or 4th in the Premier League and progressed passed the group stage of the Champions League every year. But, they have not won a major competition.

This lack of silverware has a large effect on their commercial pull. This is their biggest shortfall at the moment when compared to the biggest clubs.

Commercial revenue (£m) Competitions won in last 5 years
R. Madrid 123.5 3
Barcelona 100 9
Man Utd 81.4 6
Chelsea 56.3 6
Arsenal 44 0

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In 2010, Arsenal had the 13th highest commercial revenue despite being 5th overall. It seems that if a team does not win competitions, it cannot get massive commercial deals. The question remains, will the new rules see Arsenal gaining more success?

My answer would be ‘potentially’. If one thing is for certain, it is that other clubs will not be able to strengthen their squads with lavish signings to the same extent they currently do. This can only be a good thing for a club like Arsenal. With the new rules, clubs will have to put more pressure on developing their own players. Arsenal are as good at this as anyone, so will surely benefit.

That said, they still have a chance of winning three cups this year. If they manage to win a major competition their revenue would increase massively.

All in all, things look promising at The Emirates. They have a great Stadium, and a quality, cost-effective playing team. Arsenal are in a great position going into the new world of ‘FIFA fair-play’ in 2013.