Deloitte’s Football Finance Review

By Mel Hill

Each year, Deloitte produces its Annual Review of Football Finance, focusing on the astonishing figures that football brings to our region. Tim Bridge, Senior Manager of Deloitte’s Sports Business Group and member of pro-manchester’s Sports Industry Sector Committee, was on the Manchester based team who explored the benefits the region gets from the footballing world.

Tim presented his team’s findings from the 27th edition of the review, which focused on the 2016/17 season, on Friday 29th July at Deloitte’s Hardman Square offices in Spinningfields.

There were gasps aplenty when Tim disclosed the actual facts and figures of the money both Manchester United and Manchester City bring to Manchester. Whether you are red or blue, it’s an impressive feat to have two clubs in the top five highest earning clubs in the world in our wonderful city.

The five North West Premier League clubs (Manchester United, Manchester City, Liverpool, Everton and Burnley) generated a combined revenue of £1.7bn. The most watched team in the world is Manchester United, which sees the club have the highest revenue in world football, bringing a revenue of £581.2m to our region thanks to sponsors, match-goers, television rights and more. Manchester City bringing in a further revenue of £475.8m. Compare this to the whole of Spain, which only has two in the top 20 highest earning clubs, it really does go to show that the Premier League is the most-watched league in the world, and all eyes are on Manchester.

Football in England dwarfs others due to the popularity of the Premier League – as the most competitive league in the world, it is the most popular for ‘neutral’ fans. The league is worth €5.3bn thanks to the huge figures brought in from international broadcast rights.

In 22018, for the first time ever, no Premier League football clubs reported operating losses. Football clubs are now classed as truly investable businesses, which have a huge return on investment due to the worldwide visibility sponsor brands receive. A third of the revenue generated by the 92 clubs in the Premier League and the English Football League was made by the 17 Premier League and English Football League clubs here in the North West, amounting to £1.8bn.

With Manchester City’s recent rise, and Manchester United’s vast history, both Manchester clubs are now classed as the ‘big draw’ by broadcasters, with seven of the top ten most viewed games in the 16/17 season including a Manchester club. Manchester City are the most watched club in America, with Manchester United not far behind. This is believed to be due to Manchester City’s presence in New York as well as their ‘rags to riches’ story, which is of particular interest to a neutral supporter.

As well as a huge revenue maker, the money spent by the Premier League in the 16/17 season was staggering. Nearly £1.6bn was spent on player acquisitions. Manchester United and Manchester City were the two highest revenue generating clubs in England, but also the highest spenders in wage. United’s wage:revenue ratio was 45% while City’s was 55%, the average for the Premier League.

The revenue football generates is increasing massively year-on-year. As early as the 2012/13 season, Premier League clubs were averaging a loss of £-316bn, they went on to average a profit of £534bn in 2016/17.

Demotion from the Premier League is a huge financial loss to football clubs. Tim shared a great stat found by Deloitte during their research this year. In this year’s Champions League final, due to sponsorship, UEFA payments and other revenue generators such as ticket sales and pre-match merchandise, Real Madrid only made £4m more than Liverpool thanks to their 3-1 win in May this year.

Compare this to the play-off final between Fulham and Aston Villa. Both clubs were fighting to gain promotion to the Premier League, where they are more likely to attract sponsors, higher gates, broadcasters and more. Fulham won the game 1-0, which will see them make £170m more than their Midlands opposition, with this increasing to £280m should they avoid relegation.

Whether you enjoy football or not, there is no denying that the business side of the game is hugely profitable for our city. It is great for our hospitality sector, with the tourists heading to Old Trafford and the Etihad staying at our hotels, eating at our restaurants and drinking in our bars. The revenue brought in by business done by the clubs themselves also benefits our economy generally, and with Manchester clubs finishing first and second in last year’s league, it doesn’t look like it’s going away any time soon.

Huge thank you to Tim Bridge and Deloitte for sharing their findings in what was a fascinating event with an interesting Q&A afterwards. If you’d like to download the full briefing, click here.

If you’d like to know more about our sector group events, click here.