Money in modern football is one of the most important factors of the game, basically Paris Saint-Germain and Manchester City are the best two examples of the power of money in the this game, of course, the team needs to be able to manage its expenses and incomes in a practical way to be able to achieve results but basically having a financial power can give a team the edge to perform well on the pitch. Despite the extreme investments made in Paris and Manchester, neither of the two clubs is the most club to generate money in football. Real Madrid continues to dominate revenue making in football despite not being able to lift a major trophy last season.
Success used to be a term given to the team that won championships but nowadays, success is relative, a small club’s success is avoiding relegation, a big club’s success is qualifying to the Champions League but gigantic clubs now have a big formula that includes on-pitch success, brand awareness, stadium attendance, world-wide fan base, media dominance, future prospects and of course business and financial wealth.
Gareth Bale’s transfer will significantly increase Real Madrid’s commercial revenue
Following the release of the 17th edition of the ‘Deloitte Football Money League’ we will have a look at who and why is in the top positions. According to Deloitte, the top 20 earning teams in football together made €5.4 billion a significant increase compared to last year’s €5 billion. Another figure that shows how the football word has changed in the past two decades is the fact that the top 30 clubs for this year all earn more than €100 million per year while just two decades ago not a single team was able to generate €100 million per year. The money generated by teams excludes money made from transfer fees, taxes and competition awarded money. It only includes the following three criteria: match-day income, commercial and broadcasting.
Real Madrid continue to break revenue-making records
Despite Real Madrid’s failure to lift a major trophy last season they still managed to keep the pole position as the top earners for a ninth consecutive year; moreover, they increased the gap between them and Barcelona to €36.3 million (the previous year it was €29.6 million). Bayern Munich’s successful treble winning campaign got them into the third position as they dethroned Manchester United. PSG and Manchester City have also shown that the Middle Eastern investors are getting a return on their investments as they reached their best ever position in fifth and sixth respectively as they finally overtook Chelsea and Arsenal who dropped two positions. The two London clubs’ revenue decreased from last season but Arsenal’s resurgence this term and Jose Mourinho’s return to Chelsea might cause an increase in revenues.
Manchester United generate the most income during match-days, Real Madrid slightly edge Barcelona in terms of income made from broadcasting while Paris Saint-Germain dominate through commercial revenue. La Liga’s system helps both Barcelona and Real Madrid have the edge over all other teams in the world because of the huge sum of money they receive from their games being broadcasted.
Los Merengues have confirmed themselves as the biggest moneymakers in this sector for a ninth year and they are highly unlikely to be dethroned in the near future. They recorded a revenue growth of only 1% but it is a growth indeed. Madrid’s €518.9 million is the highest record in this history of the game, they are the only team to have ever managed to make over half a billion euros in a single season. This number is likely to increase at a higher rate of growth following the signing of Gareth Bale earlier this season, the Welsh international has already contributed a lot to Madrid’s commercial image. In addition, Madrid’s new sponsors ‘Fly Emirates’ will be adding a huge chunk of money to Los Blancos’ coffers. However, not everything looks bright, Madrid’s local market is getting tougher and ticket sales have been decreasing due to financial troubles affecting the Spanish society. Nevertheless, Real Madrid have set a business model and started to all giant teams in being able to conquer all foreign markets, their partnership with Adidas also exposes their brand to every single nation in the world.
Real Madrid’s revenue in the past five seasons
Florentino Perez is pushing as hard as he can to grab the Champions League title this term without losing focus on La Liga as Madrid remain in the race along with Atletico Madrid and Barcelona. Indeed, the tenth Champions League title could prove to be a major financial boost to Real Madrid and if they manage to lift the trophy this season, they might break away from the rest of the teams. Perez’s investment in players like Isco, Asier Illaramendi and Bale is justified by the return on investment the club is getting. The club’s debts currently stand at €541 million though it should not be a reason to worry, as most of them are long term ones while the short term ones are also being settled at the right time. Madrid may not have the best football team in the world but they surely have the best football business around the globe.