Study: European soccer’s elite increase reliance on broadcast revenue

Study: European soccer’s elite increase reliance on broadcast revenue
Operating revenues for elite European soccer clubs continue to grow primarily due to increased broadcasting revenues, which are benefiting from the new, more remunerative UEFA Champions League distribution cycle, according to a new study by KPMG.

The European Champions Report 2020 by the professional services company’s Football Benchmark team highlights the €1.976 billion (US$2.2 billion), three-year distribution cycle for European soccer’s elite club competition, which kicked off in the 2018/19 season, as the biggest source for growth. The study concludes that the massive €564 million (US$628 million) annual increase on the previous deal was the key factor in boosting revenue for all of the champions from Europe’s eight top soccer leagues.

The KPMG report highlights German champions Bayern Munich, who received more income from UEFA than in the previous season, despite having played fewer matches due to an earlier elimination at the round of 16 stage.

The Premier League’s Manchester City banked approximately €35 million (US$39 million) more from their Champions League run even though the team reached the same quarter-final stage of the competition as they did in the previous edition.

Dutch champions Ajax’s memorable run to the semi-finals resulted in pocketing an extra €78 million (US$86.9 million), which was also the main driver for more than doubling their operating revenues.

The only exception was Serie A winners Juventus. The Italian club’s 30 per cent increase in commercial revenues, the highest growth among the eight champions, was impacted mainly by the €100 million (US$111 million) arrival of Cristiano Ronaldo from Real Madrid. This surpassed their modest growth in broadcasting revenues, which was also affected by a decrease in domestic TV income due to a new distribution system in place for Italy’s top-flight. 

KPMG’s study also notes that for five of the eight champions, broadcasting has become the income stream with the largest share of total operating revenues. This was the case for only two clubs in the previous season.

Commercial income is now only the biggest area for three clubs, compared to six a year before. The three where commercial revenues had the biggest impact on their turnover were Barcelona, Bayern and Paris Saint-Germain, all of which were the only clubs who earned more than €300 million from commercial activities.

The study concludes that with UEFA money having such a major impact on top clubs’ revenues, it remains to be seen if and how the club competition format at a European level will evolve in the next few years, and how such an evolution would shape clubs’ fortunes and competitiveness.

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