Real and Arsenal climb up the money tree

Yesterday at 04:05 AM

Real Madrid were at the top of the Money League table for the second consecutive season, obliterating the old record, as they are the first club to surpass €1 bln with an astonishing €1,046m, equivalent to £899m.   The gap between 1st and 2nd has also never been higher after Real Madrid's amazing growth last season. The previous record stood at €84m in 2018/19, when Barcelona were top of the tree, but this more than doubled last season to a staggering €208m.

Manchester City retained second place with an English revenue record of £721m, even though they were less successful on the pitch, but still won the Premier League, the UEFA Super Cup and the FIFA Club World Cup.

Six other clubs reported more than £600m in revenue: Paris Saint-Germain stayed in third place with £693m, followed by Manchester United £663m, Bayern Munich £658m, Barcelona £654m, Arsenal £616m and Liverpool £615m.

There were two new entrants to the top 20, namely Aston Villa and Lyon, who replaced Napoli and Eintracht Frankfurt.  This took the number of English representatives up to 9, compared to 8 in the previous year. The big winners were Arsenal, who improved three places from 10th to 7th, overtaking Liverpool, Tottenham and Chelsea, who all dropped a place.

In fact, there are six Premier League clubs in the Top 10, split between three from the North West of England (Manchester City 2nd, Manchester United 4th and Liverpool 8th) and three from London (Arsenal 7th, Tottenham 9th and Chelsea 10th).  In addition, the lower reaches of the Top 20 feature three other English clubs with Newcastle United 15th, West Ham 17th and Aston Villa 18th.

The largest falls were registered by Juventus, down five places from 16th to 11th, as they did not play in Europe, and Barcelona, down two places from 4th to 6th, as they had to play games away from Camp Nou while the stadium was being redeveloped.

There is a clear distinction in revenue generation models between the two halves of the Money League. For the elite clubs ranked in the top 10, commercial is the most important revenue source with 48% of total revenue. In contrast, broadcast is dominant for the clubs ranked 11-20 with 47%. In other words, the leading clubs are much more able to capitalise on their brand, leading to significant commercial growth, while other clubs have relied on broadcasting income.

Given the slowdown in TV rights, with the exception of competitions reserved for the top clubs, such as the Champions League and FIFA Club World Cup, one implication is that the gap to the leading clubs will only widen.

Real Madrid and Arsenal stand out

Two clubs really stand out in terms of year-on-year revenue growth, namely Real Madrid £176m and Arsenal £153m, though three other clubs increased by more than £50m: Borussia Dortmund £77m, Newcastle United £69m and Lyon £54m.

There was also good growth at two other English clubs, Aston Villa £49m and West Ham £38m, due to more sporting success, e.g. Villa reached the Europa Conference semi-finals, while the Hammers got to the Europa League quarter-finals.

Three of the four largest reductions were also driven by Europe, or more specifically by not playing in Europe: Juventus £70m, Chelsea £43m and Tottenham £20m. Barcelona's £42m fall is down to their stadium redevelopment.

In percentage terms, Arsenal had the highest growth with an impressive 33%, as they returned to the Champions League and finished runners-up in the Premier League.

Although most of the clubs in the Top 20 enjoyed an overall revenue increase, only five of them managed to generate growth across all three revenue streams (match day, broadcasting and commercial), namely Real Madrid, Arsenal, Borussia Dortmund, Newcastle United and West Ham.

The largest growth in match day revenue was at Real Madrid with a £107m increase, largely due to stadium development leading to higher attendances and the sale of expensive "personal seat licences" to super VIP customer.

They were followed by Arsenal, who were up £29m, after implementing a 5% price increase and hosting more women's games at the Emirates. This meant that they had the highest match day income in England for the first time since 2014/15.

If we were to exclude broadcasting, the Money League would take on a more continental flavour with the top four places being filled by Real Madrid £627m, PSG £483m, Bayern Munich £470m and Barcelona £451m.

Arsenal still have the lowest commercial income in the top ten of the Money League (and among England's Big Six), though this will improve this season when extensions of the Emirates and Adidas deals kick-in.

Commercial sponsorships, merchandising and event revenue have become increasingly important with four clubs generating more than half of their income from this revenue stream: Juventus 56%, Barcelona 55%, Bayern Munich 55% and Lyon 51%.

The share at the leading English clubs is remarkably similar at five of the Big Six, ranging from 47% at Manchester United to 49% at Manchester City. Arsenal were the outlier with just 36%, underlining the need for improvement in Islington.

Manchester City £720m are £57m ahead of Manchester United £653m, mainly because of more success on the pitch, which has led to broadcasting being £73m higher, though commercial is also £40m more. This is partially offset by United having a hefty £55m more match day income.

Bayern Munich's £658m revenue is more than £200m above Germany's next highest club, Borussia Dortmund £442m. The Bavarians earn more in all three categories, but the biggest difference by far is in commercial income, which is £177m higher.

This year's Money League once again shows the financial strength of the Premier League, fueled by the much higher TV rights deal, though a few elite continental clubs continue to do well, as exemplified by Real Madrid retaining top spot with an unprecedented billion Euros.

Although broadcasting is slowing down, new highs in both match day and commercial meant that it was another record-breaking year for Money League clubs, underlining the financial strength of the football world – at least at the top of the pyramid.