Football Money League raises an important question

Since the commercialisation of football it has been assumed that on-field performance was required to ensure off-field (financial) success at football clubs. Yet this year’s Deloitte Football Money League suggests otherwise.

Chelsea Premier League

Source: AAP

The is always an intriguing read for what it says about the current state of football off the field and where the commercial side of the game may be heading.

One of the fascinating stories from this year’s analysis is that Paris Saint-Germain have overtaken Bayern Munich in the number four sport.

The French champions are actually number one for commercial revenue, beating Bayern and even Manchester United in that category, yet that does include a large amount from the Qatar Tourism Authority, which could be linked to the club’s ownership group.

The analysis also confirms the importance of the broadcast deal to the revenue of a top-level football club.

While the very top sides have a fairly even spread of revenues, with most coming through commercial sources, the English Premier League’s mega deal means its clubs are now gaining most of their income through media rights.

It also helps English clubs dominate the football money league - there are 17 EPL clubs in the top 30. Even though they aren’t number one yet, Manchester United are poised to knock Real Madrid off the top spot.

But even more fascinating is the steady rise of the English clubs who aren’t even challenging for UEFA Champions League positions.

Everton have jumped two spots, while even more surprisingly, so have Newcastle United.

A team that have struggled to maintain their Premier League status for a number of seasons, are the 17th richest (in terms of revenue) in European football.

Not far behind them is West Ham, who until this season have been a mid-table club at best and were struggling financially not that long ago.

This financial success without football success does bring to the fore an important question.

If an owner can increase their revenue without having to win any titles - as long as they can stay in the league - what incentive is there for them to try and win titles?

This is a phenomenon that already occurs in the United States, where some baseball teams make more money than others despite winning less matches. That’s because they keep their costs low and then benefit from the revenue-sharing agreement.

Even with the threat of relegation, it seems this is now taking place across the pond too.

Unless Newcastle owner Mike Ashley wants to win trophies, all he needs to do is provide enough funds for a competitive team, avoid relegation, and then take the profit.

Why bother spending any more if Newcastle are doing better in the revenue stakes than many clubs that finish above them in the table, like Southampton or Stoke?

Yet that thinking ignores the purpose of the football club. I would suggest that fans of Newcastle United do not see their club as a profit-making machine.

While they love to see their team win, for them Newcastle United is about more than that. The club plays an important part in the region, their society and their identity.

It’s the passion of these fans that keeps the Toon’s commercial juggernaut going, because Newcastle has one of the smallest markets in the Football League top 20.

While Dortmund and Gelsenkirchen (Schalke) have smaller populations, they are situated in North Rhine-Westphalia, one of the most populated regions in Europe.

Aside from Newcastle, all the clubs in the top 20 are situated in very large markets and important economic areas.

There are four clubs from London alone and its conceivable that number 28 Crystal Palace will soon join them.

It’s possible that despite their lack of football success, Milan and Inter Milan have remained in the league because of their history and the size of their market.

That raises the question, is it possible to achieve commercial success in a small market?

Newcastle show that answer might be yes, if the fans are passionate enough. But whether that commercial success gives an owner the incentive to spend and challenge for titles is another matter.

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4 min read
Published 26 January 2016 at 2:22am
By Vitor Sobral