Profits of British football champions hampered by European struggles

19 January 2018

While football clubs put an increasing emphasis on social media as a means to boost future revenues, at present a decent European campaign is the best way to boost profits, judging by last season’s performances. Real Madrid, who became the first team to retain the Champions League in 2016/17, saw the highest operating revenues of any domestic champion last year, while Chelsea’s absence from the continent’s top table saw the club’s revenues fall 4%.

In the second edition of “The European Champions Report”, KPMG’s Football Benchmark team has compared the financial performance of the domestic champions from 12 European leagues. Researchers from the Big Four professional services firm examined data from AS Monaco FC, Beşiktaş JK, Celtic FC, Chelsea FC, FC Basel 1893, FC Bayern München, FC Spartak Moscow, FC Viitorul Constanţa, Feyenoord Rotterdam, Juventus FC, Real Madrid CF and SL Benfica, in order to distil the secret to financial success for top clubs across Europe.

Every club examined returned a profit, though in some cases these fell slightly on last year. In the case of Monaco, despite an 86% increase in operating revenue this margin was extremely slim – with the new Ligue 1 champions seeing just a €0.1 million profit, despite an impressive Champions League run. While the profits of the club may well go through the roof once a transfer for sought-after wonder kid Kylian Mbappé is completed – currently it stands as a loan deal – with Paris Saint Germain, at present the French champions have a margin more in line with Romanian champions FC Viitorul Constanţa, who saw a €0.4 million post-tax profit last year.

The two largest profits seen among Europe’s best clubs came from Italy and Portugal. Juventus, who continued their impressive run of six consecutive Scudettos last season, recorded a total post-tax profit of €42.6 million, despite some of the highest staff costs in the continent. SL Benefica, the winners of the Portuguese league, saw the highest profit of the teams analysed, however, at €44.5 million. The impressive figure was in part subsidised by the club’s canny ability to cash in on top players such as Victor Lindelöf and Gonçalo Guedes (at €23 million and €26 million net profits respectively), while still maintaining domestic dominance.

Total operating revenue

Unsurprisingly, Real Madrid CF were found to be the European champions recording the highest operating revenues, at €671 million. In the season when Los Blancos became the first team to retain the Champions League since the rebranding of the former European Cup, the club saw an 8% expansion of revenues, and an overall profit of €21.4 million.

However, due to the on-pitch success of the Galacticos, Real Madrid became one of only two clubs analysed by KPMG to have decreased their bottom line results (alongside Swiss champions Basle). The quadruple which Real Madrid captured in 2016/17 caused a significant rise in staff costs of 32%, partially thanks to large bonus clauses in the players’ already-lucrative contracts. still slightly behind Manchester United FC which are not covered in our report (as they arrived fifth last year in the English Premier League).

English top flight

In an environment where all the European champions included in KPMG’s study scored an after-tax profit at the end of the 2016/17 season, clubs who excelled at player development and trading gave themselves a competitive edge. Thanks to transfer inflation skyrocketing in recent years, as well as the increasing ambition of China’s Super League, clubs which invest in young players can turn a huge profit when moving on their enhanced talents a few years down the line.

Despite having become known for their spending power in the 15 years since Roman Ambramovic took control of the club, English Premier League champions Chelsea are one of the best clubs at selling talent on at a premium. Last December, the club completed a deal which saw want-away Brazilian talent Oscar join Shanghai Shenua for £60 million – at the time a record fee in China. This was tactic helped the London-based club on its way to a post-tax profit of €18.2 million.

Chelsea Key Performance indicators

The Blues also saw their revenue significantly boosted by yet another bumper year for broadcasting rights in English football. 45% of the club’s income was sourced from TV rights last season; however, the team saw its overall operating revenue drop from the year previous to €420 million. This 4% fall can largely be attributed to the absence of European football at Stamford Bridge last year, however, following Chelsea’s disappointing league performance in the previous year. With the team successfully returning to Champions League action this season, navigating the group phase relatively simply, as well as a 60,000 capacity redevelopment of their home ground in the pipeline, Chelsea can likely expect a stronger financial performance in years to come.

Notably, the list was lacking the footballing dynasty of Manchester United, and their inclusion would have changed the look of Europe’s top financial performers a great deal. The Red Devils reported a €676 million GBP from the 2016/17 season – on their way to a League Cup and Europa League double – making them the biggest footballing institution in the world, according to operating revenues. The club’s subsequent return to the Champions League this season will likely see revenues boosted further in 2017/18. However, due to United’s mixed league form, the team could only manage a fifth place finish in their domestic league, excluding them from KPMG’s analysis this time around.

Scottish success

North of Hadrian’s Wall, meanwhile, despite staffing costs totalling a fraction of the English champions at €62.2 million, Celtic – who at present look almost certain to take their successive title run to seven years a row – still drew a regular crowd that is 7,000 larger than Chelsea. Celtic Park boasted an average attendance of 48,742 last season, helping the Bhoys to draw an €8 million post-tax profit in their ‘invincible’ season – where the team avoided a single domestic defeat – while year-on-year growth reached 52% thanks to their record breaking campaign.

Celtic Key performance indicators

Despite these impressive figures, though, KPMG’s study found that the Hoops still had room for improvement – with a stadium utilisation rate of 81%. Partially this is likely to be due to another disappointing continental outing for Celtic, who have failed to progress beyond the group phase of the Champions League for five successive seasons – if the 2017/18 season is included.

Behind Monaco (45%), Celtic were found to be the member of Europe’s elite teams whose income was found to be most dependent on UEFA competition, at 30%. Meanwhile, the lack of competition at home – thanks in large part to the liquidation of Old Firm rivals Rangers – means Celtic rely heavily on bringing the likes of Barcelona and Bayern Munich to Parkhead in order to draw sell-out crowds.

Spain rules social media

According to previous research by KPMG, thanks to the pervasiveness of digital technology, in recent years top clubs have refocussed their engagement efforts towards digital platforms and social media, putting out unique news and features from which they can make direct revenue, rather than relying on the press for distribution – giving them inexpensive access to communication techniques that have long been the preserve of only the most elite clubs. English clubs were found to presently be way ahead of the curve, with a 6% higher level of digital permeation than rivals in the German Bundesliga.

In spite of this, when only champions are taken into account regarding their social media practices, a very different set of results can be seen. While Chelsea’s social media strategy has accrued almost 73 million accumulative followers, and still sees it outpacing Bundesliga champions Bayern Munich, it is dwarfed by the figures enjoyed by Real Madrid. The La Liga giants are followed by 208 million individuals across Twitter, Instagram, Facebook and YouTube.

Social media top 5

Real’s Instagram alone boasts a larger fan base than the total tallies of most of the other European champions analysed in KPMG’s benchmark – and with lucrative markets opening to European football across Asia and the Middle East, emphasising this relatively cheap mechanism  to engage with new fans and enhance the consumption of the club brand could help Madrid further consolidate their market performance for many seasons to come.


More news on


Despite industry disruption televised sport still draws audiences

24 April 2019

Despite the disruption wrought on most areas of traditional broadcasting by streaming challengers, sports remains a major draw for audiences of television networks. This is particularly true of viewers who bet money on sporting events, with those that have skin in the game considerably more likely to follow the event on a television screen.

Arguably the true opiate of the masses, for centuries organised sports have been a major draw for hordes of fanatical spectators, from the grand coliseums of Ancient Rome to the more understated greens of local cricket grounds. The advent of television in the 20th century took this to a new level, allowing for widespread visual access to major sporting events, and sowing the seeds of a multi-billion industry in the process. Yet while watching sport remains a key pastime for many, changing consumer preferences and new technologies are affecting the traditional sport distribution channel of TV.

To better understand trends in the sporting broadcast market, Deloitte recently released an article titled ‘Does TV Sports have a Future?’ as part of its wider ‘Technology, Media, and Telecommunications Predictions 2019’ report into telecommunications trends. The conclusions in the piece are based on the firm’s own survey of 1,062 US-based respondents.

More men than women watch sport

Traditional television has in recent years begun to lose out to streaming and on demand services, resulting in a generation that is watching considerably less television. The shift in consumer sentiment has caused traditional TV companies consternation as well as shifts in business models. The average Millennial now watches 42% fewer minutes per week of TV in 2018 than they did in 2010. Yet not all areas of the traditional television market have been as hard hit by the shift, and sport is one of them. This contradicts previous studies which may have suggested that Millennials were abandoning ‘old’ media for their sport viewing.

One reason for this could well be sports betting, which means that many of the people watching the event are keen to see how their punt is faring, in play. According to Deloitte, 78% of male sport viewers, and 64% of their female counterparts would be more likely to tune in to a live event if they had bet on it.

The study found that sport gambling remains a key fixture in the gambling industry as a whole in the UK. In the United Kingdom in 2017, sports betting had £14 billion in turnover. In the four Nordic countries, meanwhile legal gambling of all kinds was an approximate €6 billion industry in 2015. In the US, meanwhile, the industry as a whole is worth around a quarter of a trillion dollars – with sports betting figuring at around 40% of that total. The industry is projected to see growth of 9% over the coming three years.

Betting on sports is associated with watching sports on TV for more than five hours on a typical weekday

However, while the gambling industry does indeed seem to have some impact on television engagement, it would be dangerous to overstate this as a positive, and such a conclusion might also put the cart before the horse. Deloitte’s study found that ‘super-superfans’ – those who watched more than five hours on a typical weekday – were more likely to gamble than average viewers.

Of those who watch more than five hours of sport per day, only 4% do not bet. Of those, 2% do not currently bet, or have never bet, respectively. Again, it could be asserted that these people are engaging with televised sport, and thus keeping the advertising-based industry afloat, due to the betting they participate in. However, it could equally be argued that they are exhibiting compulsive behaviour in spending such a large amount of time viewing sport in the first place – behaviour which would leave them as easy prey for gambling firms, who can now milk them for profit.

But where is all this set to lead? According author Duncan Stewart, the potential profitability of this model means it is likely to be exported from the UK in the coming years.

Steward concluded, “As a thought experiment, one can imagine a 30-year-old American man in the year 2025… watching a football game on the TV set, smartphone in hand. He can bet on the match at any point, modify his wager, buy back a losing wager, bet on the outcome of individual plays or individual stats such as the number of passing yards by the quarterback—all in real time, and all tailored to him. Ads could be served that are customised for him, informed by his betting and attention, and watching would have to be 100% live. The broadcaster or betting site could not only charge more for ads seen by such an involved viewer, but even have a share in (or own outright) the profits from the betting/video stream … at margins much higher than the usual for TV broadcasting. To an American, this sounds like science fiction, but in the United Kingdom, these solutions (or variations of them) are available today.”