UK: Football Money League - Changing of the guard (Continued)

Last Updated: 21 February 2006
This article is part of a series: Click Football Money League - Changing of the Guard (Part 1) for the previous article.

Article by Austin Houlihan and Rich Parkes

12. Newcastle United 

€128.9m (£87.1m)

Position 03/04: 11

Revenue 03/04: €136.6m (£90.5m)

 Following a disappointing season on the pitch Newcastle United swap places with Roma in this year’s table. Domestically, the club finished in 14th place in the Premiership, which was partially offset by extended runs in the UEFA Cup (to the quarter final) and FA Cup (semi final). However, these were not enough to prevent revenue falling, in Euro terms, by €7.7m to €128.9m (£87.1m), a reduction of 6%.

Newcastle is the highest placed club not to benefit from Champions League revenue. This is a remarkable testament to the strength of the brand and the club’s fanatical support. Average Premiership attendances stood at 51,800, while season tickets remained sold out for the thirteenth consecutive season. Matchday revenue from 30 home games increased to €52.2m (£35.3m), 41% of the total.

The reduced value of the domestic TV deal and poorer league position meant their broadcasting revenues fell to €41.3m (£27.9m), some 19% below the previous year.

Looking forward, the club will benefit from the first year of new commercial deals with Northern Rock and adidas in 2005/06 – but the club needs to be playing in the Champions League to have any chance of returning to the top ten of the Deloitte Football Money League. The injuries and turmoil the Tyneside club have experienced in the 2005/06 season to date mean such a return is likely to be delayed for at least another year.

"Newcastle is the highest placed club not to benefit from Champions League revenue. This is a remarkable testament to the strength of the brand, and the club’s fanatical support. Average Premiership attendances stood at 51,800."

13. Tottenham Hotspur 

€104.5m (£70.6m)

 Position 03/04: 14

Revenue 03/04: €100.1m (£66.3m)

 Tottenham’s slight increase in revenue to €104.5m (£70.6m) has allowed the club to climb one place to 13th, its highest ever position. An improved league performance with a finishing position of ninth boosted overall revenue growth, although Spurs remain the only club in the Deloitte Football Money League never to have qualified for the Champions League.

The club achieved growth across each of its revenue streams in 2004/05. Broadcasting revenue increased to €37.8m (£25.5m) and contributes 36% of total revenue. The 5% growth, in Euro terms, is attributed to the club’s higher league position and resulting higher central FA Premier League broadcast payments, despite the lower overall value of domestic broadcast contracts. The club also made good progress in both domestic cup competitions, reaching the quarter finals of the FA Cup, which also boosted broadcast revenue.

The club increased average home match attendances by almost 1,000 to over 35,800 to help achieve a 4% growth, in Euro terms, in matchday revenues.

A recently negotiated kit sponsorship deal, with Puma, will help increase commercial income. The impressive all round business performance will get a major boost if current improved Premiership performance translates into consistent European qualification and if the club is able to improve its matchday income either through redevelopment or relocation.

14. Schalke 04 

€97.4m (£65.8m)

Position 03/04: 17

Revenue 03/04: €91.4m (£60.5m)

 A 7% growth in revenues to €97.4m (£65.8m) moved Schalke up three places to 14th in its third successive appearance amongst the Top 20 clubs.

Commercial revenues are the largest contributor to the club’s overall total at €57.6m (£38.9m) (59% of the total). The principal contributors to this total are a shirt sponsorship deal with insurance company Victoria, and a ten-year stadium sponsorship deal with brewer Veltins.

Broadcasting revenue totalled €16.5m (£11.2m), the lowest of any Money League club, despite its second place finish in the Bundesliga, and 2004/05 being the first year of a new two-year broadcast contract with Premiere. In part this is due to the low value of Bundesliga broadcast deals compared to its European rivals. However, new improved contracts negotiated with a consortium of cable operators from 2006/07, mean that this balance is likely to be redressed in future seasons.

Schalke’s average home match attendance in 2004/05 was over 60,000, although the relatively low price of tickets means matchday revenues totalled just €23.3m (£15.7m). Qualification for the 2005/06 Champions League means that the club’s position in next year’s Money League looks secure.

15. Olympique Lyonnais 

€92.9m (£62.7m)

Position 03/04: (n/a)

Revenue 03/04: €71.6m (£47.4m)

 France’s most successful club in recent years returns to the Top 20 after a year’s absence in 2003/04, and is the only French representative in this year’s Deloitte Football Money League. This is Lyon’s third appearance in the last four years and their highest ever placing. 2004/05 saw the club win its fourth successive French League title by an impressive margin and they reached the quarter finals of the Champions League before being knocked out on penalties by PSV Eindhoven. Revenue increased by €21.3m (£14.4m), fuelled primarily by significant increases in broadcasting and commercial revenue.

Broadcasting revenue comprises almost half of Lyon’s total revenue, totalling €45.8m (£30.9m), an increase of over €12m (£8.1m) compared to 2003/04. The main reason for this increase was a change to the distribution mechanism for French broadcasting revenue. A new French League broadcasting deal with Canal Plus, worth a reported €600m (£405m) per season, commences from 2005/06 and the resultant revenue increases will provide a welcome boost to French clubs’ finances. If Lyon continues to dominate French football it will be the biggest winner of all.

Commercially, 2004/05 was the first year of a new shirt sponsorship deal with LG/Renault Trucks which is reportedly worth over €12m (£8.1m) per season – a record for French football and comparable with some of the largest deals in Europe. As a result, commercial revenue reached €26.7m (£18m), 29% of turnover.

Increased broadcast revenues and further on-pitch success may well see Lyon rank higher in future editions of the Money League. The new Canal Plus broadcasting deal may well result in more French clubs joining Lyon in the Top 20 in future years.

"2004/05 was the first year of a new shirt sponsorship deal with LG/Renault Trucks which is reportedly worth over €12m (£8.1m) per season – a record for French football and comparable with some of the largest deals in Europe." 

16. Celtic 

€92.7m (£62.6m)

Position 03/04: 13

Revenue 03/04: €104.2m (£69.0m)

Celtic are the only representative in the Deloitte Football Money League from outside the ‘Big Five’ European Leagues. Their continued presence – this is their fourth successive appearance and their fifth in total – is largely due to their huge supporter base, and consistent qualification for Champions League football. Although overall revenues fell by €11.5m to €92.7m (£62.6m), the club retained their Money League status, albeit dropping three places.

Celtic won the Scottish Cup in 2004/05, but lost the Scottish Premier League title to Rangers in the final few minutes of the season and were eliminated from European competition at the Champions League group stage.

50% of the club’s revenue came from matchday sources. This is the highest proportion of any Money League club, reflecting its large supporter base and stadium and its weak domestic broadcast revenues. In 2004/05 Celtic sold over 53,000 season tickets and their average League attendance of 58,000 is second only to Manchester United in the UK and amongst the top ten in Europe.

2005/06 will be the first year of a new kit deal with Nike reportedly worth €37m (£25m) over five seasons, and commercial revenues are boosted by impressive merchandise revenues of over €14.8m (£10m). However, for Celtic to succeed financially, Champions League qualification is imperative. The disappointing defeat to Artmedia Bratislava in the second qualifying round of this season’s Champions League may endanger their place in next year’s Top 20. 

17. Manchester City 

€90.1m (£60.9m)

Position 03/04: 16

Revenue 03/04: €93.5m (£61.9m

 Following their first appearance last year, Manchester City consolidate their place in the Deloitte Football Money League in 2004/05, despite revenue falling by €3.4m to €90.1m (£60.9m). The club experienced an improvement in on-pitch performance in 2004/05, finishing eighth in the Premiership, although there was no participation in Europe and disappointment in the domestic cup competitions.

City received €29.6m (£20.0m) from domestic broadcasting contracts as a result of its eighth placed finish, with broadcasting income totalling €38.7m (£26.1m) representing 43% of total revenue. The club continues to benefit from large attendances at the City of Manchester Stadium – average Premiership attendance was over 45,000 – which contributed to matchday revenues of €22.3m (£15.1m), whilst the club negotiated a two-year extension to its shirt sponsorship deal with Thomas Cook worth a reported €4.4m (£3m).

With a new stadium and improved domestic league performance, the challenge for City is to sustain this improvement with qualification for European competition and prolonged runs in domestic cup competitions to generate further revenue growth.

18. Everton 

€88.8m (£60.0m)

Position 03/04: (n/a)

Revenue 03/04: €66.9m (£44.3m)

 A dramatic improvement in Everton’s on-pitch performance in 2004/05 makes the club the only debutant in this year’s Deloitte Football Money League. This means that Liverpool joins six other cities – Glasgow, London, Madrid, Manchester, Milan and Rome – which have had two or more clubs in the Money League at some time since our first edition in 1996/97.

A fourth place finish in the Premiership represents a remarkable turnaround from the previous season, when Everton finished 17th, and the upturn has allowed the club to grow across all its revenue streams.

Domestic broadcast revenue totalled €33.3m (£22.5m), compared to €23.9m (£15.8m) in 2003/04, whilst average home match attendances of 36,800 drove matchday revenues to €27.7m (£18.7m), an increase of 20% in sterling terms.

Everton also managed to grow commercial revenues with a major contributor being its shirt sponsorship deal with Thai brewer Chang, with whom the club negotiated a three-year extension running to 2007/08, whilst merchandise sales increased 55%, in sterling terms, to €8m (£5.4m).

Having gained a place in the Top 20 for the first time, the challenge for Everton will be to maintain its upturn in on-pitch results and grow revenues accordingly. The European disappointment of the 2005/06 season means that the club will need a strong domestic league and business performance to maintain its new found status in the Deloitte Football Money League.

"A fourth place finish in the Premiership represents a remarkable turnaround from the previous season, when it finished 17th, and the upturn has allowed the club to grow across all its revenue streams."

19. Valencia

€84.6m (£57.2m)

Position 03/04: (n/a)

Revenue 03/04: €69.2m (£45.8m)

Valencia make their third appearance in the Deloitte Football Money League, returning after a year’s absence. Like many of the clubs at the lower end of the Top 20, they are reliant on the additional revenue generated by participation in European competition to boost revenue. In 2004/05 total revenue increased by 22% to reach €84.6m (£57.2m).

In 2004/05 Valencia came third in their Champions League group, which meant that they were eliminated from the competition but qualified for the UEFA Cup. They were subsequently knocked out of the UEFA Cup at the third round stage. The Champions League campaign generated €14.5m (£9.8m) in centrally generated revenues alone for the club. Like their fellow Spanish representatives Real Madrid and Barcelona, Valencia negotiate their own individual broadcasting deals and their current deal with RTVV is the third largest in the country, worth around €24m (£16.2m) per season.

Matchday revenues at the Mestalla Stadium were €24.1m (£16.3m), 28% of the total, from average La Liga attendances of 42,400. Valencia is reportedly considering options to further increase revenue from this source – and should any increase be delivered, this would reduce their reliance on Champions League football and help maintain their place in the Top 20.

20. SS Lazio 

€83.1m (£56.1m)

Position 03/04: 15

Revenue 03/04: €99.4m (£65.8m)

A drop of €16.3m (£11m) in revenues to €83.1m (£56.1m) means that SS Lazio slip five places to 20th position. The club’s well publicised financial difficulties have seen them fall from sixth in the Deloitte Football Money League just five years ago. This has been matched with difficulties on the pitch with a tenth placed finish in Serie A, and a disappointing group stage exit from the UEFA Cup.

Broadcasting income fell by €13.3m (£9m) to €44.1m (£29.8m), although income from this source still contributes 53% of total revenue. The absence of Champions League football partially explains this reduction, although the club continues to benefit from a long term commitment from Pay-TV operator Sky Italia, with the current deal reported to be worth €32m (£21.6m) a season.

Lazio’s average attendances for Serie A matches was 38,200 in 2004/05, over 10,000 down on the previous season with matchday revenues dropping to €14.6m (£9.8m) as a result. As with its city neighbours AS Roma, redevelopment of the Stadio Olimpico is likely to be crucial in increasing matchday revenues.

To date Lazio have been ever present in the Top 20, but the failure to qualify for European football in 2005/06 means that we believe that Lazio may struggle to make it ten out of ten next year.

Leagues within the Money League?

This is the ninth year of the Deloitte Football Money League. Since our first edition in 1996/97 we have seen the collective revenues of the Top 20 clubs rise from €1.2 billion to over €3.1 billion in 2004/05. In this article we review the composition of the list over the years, and identify the key trends in terms of participation and the winners and losers over that time. We also investigate what a club might need to enter a future Money League, and identify the clubs to watch in the future.

A total of 34 clubs have appeared in the nine editions of the Deloitte Football Money League. Of these, 13 are ever presents, while Chelsea has appeared in all but one. Eight clubs have only appeared once, and a further seven clubs have appeared less than four times.

Only eight countries have been represented in the nine Money Leagues, and two of these only appeared in our first edition. The 20 clubs are now drawn from the Big Five European Leagues (England, Italy, Germany, Spain and France) and Scotland. Europe is the primary focus of football’s attention (and most of its money) and the vast majority of the world’s top players now play their club football in the Big Five leagues. Only two countries – England and Italy – have ever provided more than five representatives to any Money League, and this year 13 of the 20 clubs come from these two countries. Only in exceptional circumstances is the Money League likely to see any representatives from outside the Big Five European countries (and Scotland).

Awarding points based on finishing position in each list allows a ‘League of Money Leagues’ to be created. This gives an indication of a club’s long term staying power – showing not just the ability to remain in the list itself, but to maintain a consistently high position.

There are clear parallels with the long-term ‘pecking order’ seen in many domestic leagues. There are regular Champions League performers, ever presents in the league, some aspiring to reach the top five, others slipping back, some surprise packages excelling for a year or two and others overstretching and ultimately falling away. 

9 appearances

Arsenal, FC Barcelona, Bayern Munich, Internazionale, Juventus, SS Lazio, Liverpool, Real Madrid, Manchester United, AC Milan AS Roma, Newcastle United, Tottenham Hotspur

8 appearances


6 appearances

Leeds United, Borussia Dortmund, Parma, Rangers

5 appearances


3 appearances

Aston Villa, Olympique Lyonnais, Schalke 04, Valencia

2 appearances

Manchester City, Olympique Marseille, Paris St Germain

1 appearance

Ajax, Atletico Madrid, Everton, Fiorentina, Flamengo, Hamburg, Sunderland, West Ham United

Source: Deloitte analysis.

 "There are regular Champions League performers, ever presents in the league, some aspiring to reach the top five, others slipping back, some surprise packages excelling for a year or two and others overstretching."

The top five places are taken by the Money League ‘elite’ – truly global clubs with significant and increasing international support to add to their millions of domestic fans. Despite losing the number one spot this year Manchester United remain – using this long term league table – the most financially successful club. Behind them, another four clubs – Real Madrid, Juventus, Bayern Munich and AC Milan – are also part of this elite group. It is notable that these five clubs between them have won 11 of the 20 domestic championships in the last five seasons.

A host of other clubs are in the ’chasing pack’ – FC Barcelona, Chelsea, Internazionale, Liverpool, Arsenal, Newcastle United, AS Roma and SS Lazio – who have appeared in every recent Money League. With significant domestic and, in many cases, overseas support, these clubs’ appearance in the Money League is expected, but consistent on pitch performance (particularly in Europe) is the difference between a mid table slot and the possibility of challenging the big five.

Thereafter places are filled by clubs which have relatively similar revenues. In the main their Money League appearances are dependent on success on the field – both domestically and in Europe. The challenge for these clubs is to develop such that European competition is a regular occurrence, which may lead to a regular Money League place. Tottenham Hotspur is, to date, the anomalous exception that proves the rule. Some of this pack have realistic ambitions to permanently join the Money League elite, others will slip back.

At this end of the table competition is fierce. Table 2 shows the five clubs which are currently ’bubbling under’ – some of the names are familiar from previous Money League editions. The difference this year between Valencia in 19th place and Middlesbrough in 25th is less than €8m, and a successful 2005/06 on the field could see any one of the clubs ’bubbling under’ make the next Top 20.

Looking forward, which clubs can we expect to see moving up future Money Leagues? Broadcasting revenue has underpinned all of our Money League clubs’ revenue growth in recent years, but the real successes have been those clubs which have developed all three of their primary revenue streams – matchday, broadcasting and commercial. In recent years we have seen three clubs make strides towards the elite group at the top of the list, all displaying different growth factors.

Arsenal were placed in 20th position back in 1996/97, but their position has steadily improved and they have been a top ten fixture for the last four seasons. Arsenal have been restricted by the limited capacity of Highbury and although growth in other areas has been impressive, matchday revenue has been limited by both the stadium size (under 40,000) and facilities. The new, state of the art Emirates Stadium, opening in 2006/07 and seating 60,000 is likely to provide a significant boost to matchday revenues and may, given continued regular Champions League football, see Arsenal challenging in the top five when they take up residence at Ashburton Grove.

Barcelona’s renaissance in recent years has seen them move back into the top six for the first time since 1998/99. The last two seasons have seen the club grow revenue by almost 70%, with significant growth in all areas. Further on pitch success – and moves to engage commercially with Barca’s huge international fanbase and maybe even a shirt sponsor – could see them join the elite group.

Last year’s biggest movers, Chelsea, consolidated their top five place this time round. Roman Abramovich’s takeover in 2003 was the catalyst for a spending spree unlike anything seen before in football. This has been accompanied by levels of on-pitch success that have seen a step change in revenues. Further growth in commercial revenues as a result of new shirt and kit sponsorship deals can be expected in 2005/06.

In terms of potential challengers from outside England and Spain, two countries to watch will both have cause for celebration during the summer. Germany will host the 2006 World Cup in over €1 billion worth of new and redeveloped stadia. This has allowed the German clubs to develop their facilities further – to become a revenue generating asset seven days a week – and on matchdays has enabled the development of higher margin corporate packages. The new stadia have been a big success to date. Bundesliga attendances are at record levels and if the level of interest can be maintained following the World Cup, we could see more German clubs entering the Top 20.

In France, July 2006 sees the start of a groundbreaking new domestic broadcasting deal with Canal Plus, reportedly worth €600m per season. This is a 50% increase on the value of the previous deal and, accompanied by a change in the distribution mechanism among clubs, means that the most successful clubs will get a larger share of the cake. In future years we could see Olympique Lyonnais move towards the top ten and the return of Olympique Marseille and Paris St Germain to the Top 20. The challenge for all our Money League clubs is to keep innovating and developing. In such a competitive environment there is no standstill option. It is not just on the pitch that you lose if you snooze and we expect further developments going forward. We will continue to monitor the progress of all of Europe’s premier clubs in coming years.

"Barcelona’s renaissance in recent years has seen them move back into the top six for the first time since 1998/99."

Rich Parkes
Sports Business Consultant

Real Madrid’s capture of the title of ‘the world’s highest earning football club’ is the culmination of a remarkable transformation in the club’s revenue generating capacity over the last few seasons. During this time, it has doubled its income from €137.9m (£83.0m) in 2000/01, when it was placed sixth in the Deloitte Football Money League, to €275.7m (£186.2m) in 2004/05.

The Real deal

In 2004/05, a €39.7m (£26.8m) growth in the club’s revenue allowed it to not only overturn a €23m (£15.2m) deficit between itself and Manchester United, but open up a €29.3m (£19.8m) gap on the now second placed Manchester club – a gap which looks set to widen in 2005/06.

As interesting as there being a new number one is the fact that Real has ‘broken the mould’ in terms of revenue growth for football clubs. Over the last ten years, the drivers of revenue growth for the majority of clubs have been either large increases in broadcast rights fees or enhanced matchday revenues from improvements in stadia facilities. Often it has been a combination of the two.

However, in Real Madrid’s case, whilst matchday revenues and broadcast revenues have grown by €22.3m (£15.1m) and €30.1m (£20.3m) respectively since 2000/01 (compound growth rates of 11% per annum in both cases), it is the club’s ability to grow commercial revenues that has guided it to the top of the Money League.

Commercial revenues have increased by €85.4m (£57.7m) between 2000/01 and 2004/05, a compound annual growth rate of 34%. Income from this source now accounts for 45% of total revenue, following growth of €38.1m (£25.7m) in the past year. Broadcasting accounts for 32% of total revenues whilst matchday contributes 23%. This compares to 2000/01 when broadcasting was the major contributor to revenues at 42%, following by matchday at 30% and then commercial at 28%.

Of the Top 20 clubs, only Real and the two German clubs, Bayern Munich and Schalke 04 – who have a much larger and stronger domestic market – currently have commercial revenues as their largest income source.

It is no coincidence that this reshaping of Real’s revenue profile and their growth over the last few years has occurred under the presidency of Florentino Perez. Since his election in July 2000, Perez has redrawn the club’s strategy and operated the traditional members’ club as a commercial business in order to allow it to compete consistently with Europe’s elite. The club has always been synonymous with footballing success. It has won the Spanish Primera Liga title a record 29 times, and the European Cup nine times, more than any other club. Perez’s feat has been to turn the interest and deep-seated popularity that success brings, into significantly greater monetary returns than in the past.

Underpinning this commercial growth has been the club’s strategy of building ‘content’ in order to develop a product that people from around the world can identify with, and ultimately buy into. The primary content of course is players, and Perez has built the club around a collection of identifiable world class players. One of his key election pledges in 2000 was the acquisition of Luis Figo from arch rivals Barcelona, and this has been followed by the arrival of star players such as Zinedine Zidane, Ronaldo, and David Beckham.

The club has aimed at not only building its profile and following, but also crucially at engaging supporters sufficiently in order to generate a financial return. Whilst many clubs have championed the potential of capitalising on the interest in their club outside their domestic market, Real have been successful at actually realising this potential.

Put your shirt on it

One of the most publicised effects of acquiring world class players is soaring sales of shirts and associated merchandise which, in turn, has delivered increased revenues to Real. Merchandising and licensing contributes the largest proportion (44%) of the club’s commercial revenues at €54.1m (£36.5m). The remainder is derived from sponsorship and advertising (€45.9m (£31m)), stadium tours and conferencing (€7.2m (£4.9m)), and other marketing sources (€16.8m (£11.3m)).

The club’s merchandising and licencing strategy is built on an outsourcing model. They form partnerships with commercial organisations, whereby the buyer acquires the right to use the club’s name and associated logos to produce and sell products in return for paying Real a fixed licence fee and a proportion of sales from that particular product.

The appeal of such deals to Real is obvious. The club gets paid in hard cash rather than any ‘value in kind’ or ‘barter’ arrangements, and the more successful the sale of that particular product, the more revenue is derived by Real. Meanwhile, the design, manufacture and promotion is in the hands of the ‘expert’. This substantially derisks the club’s business both financially and operationally, although of course partner selection and quality is fundamental to ongoing success.

In terms of sponsorship, the Real brand is hugely popular both in Spain and around the world. In the eyes of international brands seeking an association, the club is one of an elite handful which can bring cost-effective visibility and consumer credibility around the world.

Real has, under Perez, refined and modified its sponsorship strategy with a tiered model which is based around more than simply offering advertising opportunities to corporations. In common with all the best football clubs at any level, the sponsorships are partnerships whereby both parties leverage off each other. At the top tier, the club has two main sponsor partners – international apparel manufacturer adidas and mobile communications company Siemens Mobile. The deal with the latter is worth an estimated €14.0m (£9.5m) a season, whilst the partnership with adidas, was extended in 2004 under improved terms until the end of the 2011/12 season.

Below these two top-tier sponsors, is a band of four ‘international’ sponsors – soft drinks company Pepsi, car manufacturer Audi, telecommunications company Telefonica, and alcoholic drinks firm Mahou. Finally, a third tier contains an expanded number of national sponsors.

Reaching the stars

Real’s commercial strategy has been based on reaching and engaging fans, not just in its domestic market, but increasingly on an international basis.

The strategy seems to be working. The club estimates that 40% of its merchandising revenues were derived from within Spain in 2004/05, with 60% internationally. This compares with five years ago, when the club estimated that between 80% and 90% of revenues were earned in Spain.

The club has also gained increased revenues over the past five years from international tours, particularly to Asia. In 2004/05, revenue from international tours and friendly matches totalled €22.9m (£15.5m), driven mainly by a pre-season tour to China, Japan and Thailand.

Many other European clubs have also used overseas tours to try and capitalise on the strong interest within Asia. However, whilst allowing supporters in these regions to see the club ‘in the flesh’ rather than just through the television set, a one-off tour to these regions is unlikely to cement this relationship and provide a strong and constant source of revenue.

Real is clear that its touring programme is part of a wider strategy for building on its popularity in these regions. The club has an internal international business development team solely responsible for building partnerships in international territories. This team actively builds and promotes the club’s brand and popularity, and forms local partnerships in these regions.

The reign in Spain?

So can Real’s revenue growth be sustained? Many companies and industries often experience periods of rapid growth followed by a slowdown. However, the signs for Real appear promising. For a start, the club recently signed a new main sponsorship deal with information technology company BenQ reported to be worth between €20.0m (£13.5m) and €25.0m (£16.9m) a season over four seasons to the end of 2009/10.

The club boasts a relatively modern 80,000 all-seater stadium (the Bernabeu), and with strong corporate interest, it seems reasonable and logical that the club may be able to further develop its matchday corporate hospitality operations. There should be growth potential here for Real, given that its matchday revenues currently lag behind many of its European rivals.

In addition, the club’s broadcasting deal, which was once the most lucrative of any individual club, has been dwarfed by recent contracts negotiated by some of its European rivals, particularly the big Italian clubs. Real’s current deal with Sogecable, worth a reported €54m (£36.5m) per season, expires in 2007/08 and whilst it is difficult to predict the future value of broadcast contracts, the club is likely to be encouraged by the increased level of competition for sports rights within broadcast markets and the club’s level of international support.

Of course, success on the pitch is the key to delivering further revenues and keeping the fans happy. It underpins the club’s revenue generating capacity in the longer term. For example, the club derived €13.7m (£9.3m) in 2004/05 from UEFA Champions League centrally distributed revenues after being eliminated at the first knockout stage. Winning the competition in 2005/06 could earn the club at least twice that in centrally distributed revenues plus the additional matchday revenues from home matches.

Rival Money League clubs will also continue to grow revenues. Juventus’ massive new broadcast deal is likely to boost revenue in future seasons, whilst over the last two years, Chelsea and Real’s arch rivals Barcelona have shown the largest absolute and relative revenue growth. Equally Manchester United, has the global interest to consistently challenge for the top spot.

Standing still is not an option, but Real Madrid has already set a benchmark for its rivals. With budgeted revenues of €300m in 2005-06, the club shows no signs of waiting for the chasing pack to catch up.

Austin Houlihan
Sports Business Consultant

"In terms of sponsorship, the Real brand is hugely popular both in Spain and around the world. In the eyes of international brands seeking an association, the club is one of an elite handful which can bring cost-effective visibility and consumer credibility around the world." 

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This article is part of a series: Click Football Money League - Changing of the Guard (Part 1) for the previous article.
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