Friday, August 22 nd, 2014
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Commercial revenues: Premier League and Bundesliga eclipse Serie A clubs
Italian football is a million miles away from the three main European leagues in terms of sponsorship policies and brand valorization. Such a gap has direct repercussions on the pitch
The lack of new generation stadia condemns Italian football to paralysis, but it's the commercial sector that creates a rift between Serie A and the big European clubs. Italian football has very modest incomes from sponsorships, merchandising and, more generally, all brand valorization activities.


A Premier League club gains – on average – 35€ M per year from sponsorships and advertising, a Spanish club 20 € and a Russian one 16,4. Commercial revenues for Italian clubs are 16€ M on average. Among the main European leagues, Serie A outperforms only the French (14,5) and Dutch (12,8) ones. The leaders in this ranking are Bundesliga clubs. The German sides, which have always been virtuous in their financial running, and are now bearing the fruits also on the pitch, are now top of the class with 40€ M per year.


In the 2012/2013 season, the commercial sector accounted for 700€ M of profits, almost 33% of total Bundesliga revenues. In detail, merchandising brought 120 € M (+5,5%) and sponsorhips 579€ M (+26%). Basically, German clubs doubled Serie A ones, whose total amounted to 350€ M only.


According to Deloitte’s rankings, the gap is clear. But we need to read those rankings with a grain of salt, since for example Paris Saint Germain and Manchester City commercial revenues are under investigation by UEFA auditors, as they depend on corporations and companies linked to the clubs' properties. In particular, UEFA is investigating a 150-200€ M deal between PSG – owned by the Qatar Sport Investment – and the Qatar Tourism Authority and another 75€ M deal between PSG and Qatar telecommunication provider Ooredoo. Revenues originating from these deals would elude the rule that prevents a club owner from recapitalizing his club beyond a 45€ M treshold (for the 2012-2013 two-year-period). Such data should be “sterilized” and recorded at a fair value, i.e. compared to sponsorships signed by clubs of the same level.


The same for the commercial relationships between Manchester City and Etihad, as they both belong to the same group of Sheikh Mansour.


If we consider only the fair value, Bayern Munich has the leadership. The defending champions of Europe have 237€ M of revenues from sponsorships and advertising (55% of total revenues which amount to 431 M). In detail, revenues from merchandising between 2012 and 2013 increased- also thanks to the Champions League victory- by 44% up to 83 € M. For the current season, Bayern will have additional benefits from the extensions of the deals with Coca-Cola, Lufthansa and Deutsche Telekom (the latter brings 30 million per season). And we still have to add the agreements with Adidas (25€ M per season)- whose CEO Herbert Heiner just became the new President of Bayern since the Uli Hoeness resignation-, and Allianz (that has just acquired 8,3% of the club) that ensures 6 million euros for the stadium's naming rights.


The Bavarians are heeled by Real Madrid, whose commercial revenues grew by 4% between 2012 and 2013 reaching 211€ M. The Merengues know how to attract sponsors from all around the world, even beyond the hardships of the Spanish national economy.


The most healthy club in the world is still Manchester United, whose revenues between 2002 and 2013 increased by 30%, reaching 178€ M. Such amount is intended to grow due to a multiplication of global and regional partners, enhanced by the opening of a new office in Hong-Kong. In the next season, despite an unlucky campaing by Moyes’s side, big deals will come into force: the mega-sponsorship with General Motors (Chevrolet) and Nike (renewal is very close). Both deals together could bring something like 150€ M per year.


Another commercial behemoth is Barcelona, although their commercial revenues decreased by 3% between 2012 and 2013 due to the missed Champions League win. Starting from this season, the Blaugrana will be able to count on 30,5€ M from the jersey sponsor Qatar Airways.


Flying back to the UK’s Premier League, the performances of Liverpool and Chelsea stand out. For the Reds, commercial revenues represent 47% of the total (114€ million out of 240). The partnership with Warrior Sports brings 25₤ M. But Liverpool has widened their commercial portfolio with Electronic Arts and Gatorade and the renewal of the Standard Chartered and Carlsberg deals.


The Blues closed the 2012-13 season with an increase of their commercial revenues of 19%. The amount reached almost 100€ M thanks to new global partners such as Gazprom and Delta, to the renewal of the Samsung sponsorhip (18₤ M per year) and the extension of the deal with Adidas till 2023.


Another club that grew steeply is Galatasaray, which exploited the boom of Turkish economy to increase their commercial revenues by 20%, reaching an amount of 70€ million – 44% of total revenues – by signing deals with Opel, Fox, W Collection, Odeabank and extending the current contracts with Nike and Turk Telekom. Galatasaray also started a broad merchandising plan by opening almost 100 outlets in Turkey and abroad (Germany, Azerbaijan).


Finally, it's time to talk about Italian clubs. Juventus commercial revenues reached 68,4€ M (25% of total revenues) although in the balance sheet up to 30 June 2013 the amount is 52,5€ M (due to a different classification of some revenue entries). According to Deloitte, these incomes could increase due to new agreements with Adidas (it will start in the 2014-15 season), Samsung and Bwin.


Deloitte estimated 96,2 € M of commercial revenues for Milan, although the consolidated balance sheet reports 80€ M for a different classification of some revenue entries. We're talking about one-third of total revenues, which is the best performance among Italian clubs, despite a 1% decrease that should be compensated by the deals with Huawei and Banca Popolare di Milano.


After the handover from Massimo Moratti to Erick Thohir, Inter started to work on brand valorization, especially in the Asian market. Thanks to the renovation of their contracts with Pirelli and Nike, in 2012-13 the Nerazzurri had 68€ M of commercial revenues.



Marco Bellinazzo is journalist at Il Sole 24 Ore, this article was originally posted in Italian on his blog "Calcio & Business"

Monday, March 24 th, 2014
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