UEFA recorded a sharp increase in club income after the pandemic and the continuing polarization of football

The next report on the state of the economy of European club football, published by the Union of European Football Associations (UEFA), recorded obvious trends. The income of clubs after the coronavirus pandemic is constantly growing and at the end of 2022 is very close to €24 billion. At the same time, as usual, the growth is mainly due to the leading leagues, and “polarization”, that is, the gap between them and the rest of the championships, is nowhere doesn’t disappear. However, it also exists within the “Big Five”, in which the English Premier League (EPL) leads by a huge margin.

The Union of European Football Associations has published a report The European Club Finance and Investment Landscape. It analyzes the key parameters of the economics of continental club football. True, the main data set is taken from the 2022 financial year.

The report opens with a fact that those who closely follow what is happening in the football economy could easily guess, if they did not miss similar studies published earlier: club revenues are growing. In 2022, the 700-plus teams representing UEFA’s 55 national associations generated a record €23.9 billion. This is a 13 percent increase compared to the previous year. But UEFA still prefers comparisons with 2019 for a very understandable reason – taking as a basis the figures of the last season before the coronavirus pandemic, due to which the football market dropped significantly. Here the breakthrough is much more modest – 4%. But the report’s authors stress that it should actually still be considered very solid, given that many countries were still under pandemic-related restrictions in 2022. They had a negative impact, in particular, on revenue from ticket sales. The latter decreased compared to 2019 – from €3.3 billion to €3.1 billion. Other significant items – income from television rights and commercial activities – increased.

At the same time, UEFA notes with satisfaction that, according to its preliminary forecasts, in the next similar report, judging by the indicators that the structure’s analysts have already received from clubs, a new record will be recorded.

Moreover, in 2023, the growth in total income will be as much as 11.7% – including precisely due to the removal of the remnants of anti-coronavirus restrictions, as well as some other nuances, such as more profitable television contracts than before for some associations and a general increase in interest in football. In other words, they will apparently reach the €26 billion mark.

These pleasant observations are accompanied by some not so pleasant ones. We are talking primarily about a phenomenon that UEFA President Aleksandar Čeferin focused on in the last decade, shortly after taking office in 2016, and about which he has been constantly talking since then. Football “polarization” is not going away.

First of all, UEFA, of course, points to the enormous difference in wealth and resources between the five top leagues – English, Spanish, Italian, German and French – and the rest.

The “Big Five” accounted for the lion’s share of all revenue generated—about €17 billion. And besides its members, only one league managed to cross the €1 billion mark. And, oddly enough, it turned out to be the Russian Premier League (RPL), with revenues of €1.05 billion, despite the fact that in 2022 it was already in international isolation, lost European cups and, in principle, it seemed, should have given up such weakened commercial positions. But no, with RPL everything turned out to be not so bad. It was not just ahead, but significantly ahead of the Dutch (€629 million), Portuguese (€557 million), and Turkish (€533 million) championships.

But there is also “polarization” within the Big Five. And again, it arose a long time ago. The English Premier League’s revenue in 2022 exceeded its closest pursuers – the Spanish and German championships – by almost twice – €6.5 billion versus €3.3 billion for leagues that are somehow inconvenient to call competitors. Italy and France, with their €2.3 billion and €2 billion in income, are even more modest. There is clearly no threat to English dominance in the near future. It is based primarily on the enormous earnings from media rights—approximately €3 billion annually. And there are no prerequisites that other Big Five countries in this aspect in the foreseeable future will be able to at least come close to the Premier League, which has already extended television contracts even on more favorable terms than those relevant for the latest report.

The difference in opportunities between the English League and other UEFA championships was illustrated, in particular, by an interesting rating. He sorted the clubs by the cost of their squads at the beginning of 2023 based on the transfer value of the players in the application.

Manchester United are at the top by a landslide.

His bid was valued at €1.42 billion, which is almost €300 million more than Real Madrid’s 2020 roster, which was still considered the most expensive in history. Along with Manchester United, bids from three more clubs for €1 billion have gone off scale, and two of them – Manchester City and Chelsea – are also English. Real Madrid joined their company.

According to UEFA, the flow of money flowing into the Premier League has another positive effect for it. It makes it more attractive for foreign investment. In 2022, 16 of the league’s 20 clubs had at least one foreign shareholder. And, for example, in the Spanish championship there were only seven such teams.

UEFA also considered the data on clubs’ spending on salaries of players and staff to be rather alarming.

They amounted to €16.9 billion in 2022. What excited the authors of the report was not so much the figure itself as its comparison with data for previous years. Let’s say in 2019 they spent 15% less on salaries. This allowed UEFA to characterize the growth as “inflationary”, specifying that too high a share of the cost of paying footballers tends to be fraught with financial risks. Meanwhile, in Italy and France they account for more than 80% of income.

However, it seems that UEFA devoted a lot of space to this topic in its report, only to recall the timely adjustments it made to its financial fair play, replaced by the principles of so-called financial sustainability. They precisely demand from clubs a reasonable policy in the field of salary expenditures. UEFA believes that they should not exceed 70% of expenses. And the structure, of course, also saw the fruits of the updated program when preparing its report. It follows from it that in 2023 “wage inflation” will decrease radically and will not even reach 4%.

Alexey Dospehov