Managing Your Cash Flow
How the highest-earning UK football clubs found financial success in 2015
11 min read
01 February 2016
With a ten per cent strengthening of sterling versus the euro helping English clubs, a record nine Premier League clubs were ranked within the top 20 highest-earning football clubs in the world. As such, we took a look at the ones that made it into the top ten and how.
The 20 highest earning football clubs in the world generated £5bn of revenue last season, an increase of eight per cent on the previous year, according to the 19th edition of the “Football Money League” from Deloitte.
And for the first time, the top three clubs in the Football Money League have all passed the €500m revenue mark. Real Madrid once again delivered a strong financial performance, buoyed by growth in commercial revenue, with the planned redevelopment of the Santiago Bernabéu helping to continue the growth in matchday income in the coming years. It was followed by FC Barcelona, with a revenue of £426.6m.
With a ten per cent strengthening of sterling versus the euro helped English clubs, however, a record nine Premier League clubs are ranked within this year’s top 20, one more than in last year’s edition. Premier League clubs now dominate the top 30, with 17 of those clubs having played in the Premier League during the 2014/15 season.
As over half of the top 30 already make up of Premier League clubs, and the new Premier League domestic broadcast deal is set to come into effect in 2016/17, there is a chance that the Money League top 30 will feature all 20 Premier League clubs in two years’ time.
As such, here are the UK clubs that made the top ten of the highest-earning in the world list.
Manchester United – ranked third
Manchester United slipped one place to third as the absence of European football resulted in double digit percentage decreases in both matchday and broadcasting revenues. It also meant that, for the first time since 1989/90, broadcasting revenue fell to £107.7m. However, the combination of a favourable exchange rate movement and the underlying strength of the club’s business model, ensured the club remained in the Money League top three.
According to Deloitte, commercial revenue grew by £7.8m to reach £200.8m, representing over half of total revenue. Within this, the commencement of the seven year General Motors shirt sponsorship, plus the addition of five global, four regional and two financial services and telecom partnerships, helped sponsorship revenue increase by 14 per cent to £154.9m. Commercial revenue will increase even further in 2015/16, with the record £750m ten-year adidas kit manufacturer deal starting this season.
United become the first English team to surpass 100m followers collectively across social media platforms, an increase of over 50 per cent on the previous year. Around 15 per cent of these connections are based in China, and with the recent announcement of a deal with China’s leading sports media platform, Sina Sports, to broadcast the club’s dedicated 24-hour MUTV channel in China, United will want to further strengthen its following in this market.
Manchester City – ranked sixth
Despite modest revenue growth compared with previous years, Manchester City maintained its sixth position with a record revenue of £352.6m to become the second English club ever to break the £350m revenue barrier.
This was due to matchday revenue falling by £4.1m to £43.4m after a four per cent reduction in average attendance at the Etihad Stadium in 2014/15, due to seat restrictions to allow for 7,000 seats to be added to a redeveloped South Stand and three new pitchside rows in time for the start of the 2015/16 season. So far, all 2015/16 home league fixtures have attracted attendances in excess of 53,000 and with planning permission in place to further increase capacity to 61,000, the Etihad Stadium could become the second largest English club stadium behind Manchester United’s Old Trafford.
Broadcast revenue increased by two per cent to £135.4m. Commercial revenue, accounting for 49 per cent of City’s total, rose to £173.8m and follows the creation of 22 new global and regional partnerships including deals with SAP, Nissan, Citi and PZ Cussons. Deloitte claimed that City’s current position as a top four Premier League club, coupled with stable Premier League distributions until the new rights deal in 2016/17, means a strong run in the Champions League is the most likely source of an increase in broadcast revenue in 2015/16.
In late 2015, a Chinese consortium led by China Media Capital Holdings also reportedly invested £255m for a 13 per cent shareholding in the club. Following Dalian Wanda at Atlético de Madrid, this is the second notable investment in a Money League club from China.
Read further to find out where Chelsea and Liverpool ranked.
Arsenal – ranked seventh
After consecutive years in eighth place a ten per cent increase in revenue in 2014/15 helped Arsenal leapfrog Chelsea into seventh. The vast majority of this revenue growth is extra commercial revenue, which rose by £26.2m, the second highest commercial revenue growth of all Money League clubs in 2014/15. This increase has been driven by the commencement of the club’s new kit sponsorship deal with Puma.
Together with the recently renewed shirt and stadium sponsorship agreement with Emirates and a number of new regional partnerships in various territories around the world, this has helped boost its commercial revenue to over £100m for the first time.
At £100.4m Arsenal recorded the highest matchday revenue of any Money League club despite the club playing two fewer home games than in the previous season. Broadcast revenue rose slightly by £4.4m to £127.6m, remaining the club’s primary revenue stream and comprising 39 per cent of the total.
Record values for all revenue streams have resulted in Arsenal’s rise up the Money League, with the Gunners earning the highest matchday revenue of all clubs, a feat it has never achieved before. It is also the second English club ever to earn over £100m in each of the three core revenue areas in the same season.
Chelsea – ranked eighth
Total revenue fell in 2014/15 from £324.4m to £319.5m, resulting in a demotion of one place to eighth in the Money League. The majority of the £4.9m decrease in revenue can be attributed to a fall in broadcast revenue, despite gaining the highest payout of centrally distributed revenue of any Premier League club in 2014/15 (£99m). And losing in the UEFA Champions League in round 16, compared to the prior season run to the semifinals, resulted in a reduction in UEFA distributions from £36.3m to £29.8m.
Despite the decrease, Chelsea has the fourth highest broadcast revenue of all Money League clubs, with only Real Madrid, Barcelona and Juventus generating more. A large uplift is expected in commercial revenue is soon expected as a result of the reported £200m five year deal with Yokohama Rubber, the second largest shirt sponsorship in English football history.
The capacity constraints of Stamford Bridge were once again highlighted in 2014/15, as matchday revenue fell slightly by £0.2m to £70.8m, claimed Deloitte. Despite having the fifth highest matchday revenue of any Money League team, Chelsea has made its intentions clear on enhancing it further, recently submitting a planning application to build a new 60,000 seater stadium at Stamford Bridge which would deliver a significant boost to revenues in the medium term.
Liverpool – ranked ninth
Liverpool maintained ninth position in this year’s Money League, following a 17 per cent increase in revenue after a return to the UEFA Champions League and healthy increases in matchday revenue.
Despite average league attendances dropping, matchday revenue grew by £11.7m, owing primarily to four home matches played in European competitions and three extra domestic home matches due to semifinal runs in both cup competitions. The redevelopment of Anfield is now well underway with work expected to be completed during the 2016/17 season, which should result in significant matchday revenue increases, with capacity set to increase to 54,000.
Liverpool’s broadcast revenue increased by £21.9m as the gains from a €34.1m UEFA distribution outweighed a decrease in Premier League receipts of £4.7m, due to a lower league finishing position. The club’s commercial revenue increase was only eight per cent when compared to the matchday and broadcast revenue increases. This growth is set to continue as Standard Chartered, who have appeared as Liverpool’s shirt sponsor since the 2010/11 season, announced a three year extension through to the end of the 2018/19 season.
In addition, Deloitte explained, New Balance, the parent company of the 2014/15 kit supplier Warrior, took over as kit supplier from the start of the 2015/16 season.