Reuters.- The departure of the six-time Ballon d’Or Lionel Messi from Barcelona has confirmed what many fans have feared for years: the salaries of the stars are now so stratospheric that they can bankrupt even the biggest clubs.
The figures that are handled in the richest leagues in the world are mind-boggling, where financial tensions are most acute, and Covid-19 has exacerbated the problems.
WAGES
Barcelona president Joan Laporta said the club was forced to let Messi go because his salary demands would have jeopardized his future.
Laporta estimated that the Argentine’s new contract would have meant that the club paid more in salaries than it earns, 110% of its income to be exact. Without Messi it will be around 95%. “The club is above everything, even above the best player in the world,” Laporta said.
A decade ago, salaries in the big five leagues totaled about € 5.6 billion, according to Deloitte estimates. The relationship between salary and income – the money that the clubs pay to the players and the rest of the staff – amounted to 51% in Germany, 70% in the Premier League and 75% in the Italian Serie A and French Ligue 1 .
In the last season, the combined European wage bill had skyrocketed to 17 billion euros ($ 20 billion).
Covid-19 and empty stadiums caused league revenues to drop an average of 11%, which meant that the ratio of wages to income increased to 73% from 61% in 2018-19 in the Premier League, to the 67% from 62% in Spanish La Liga, 78% from 70% in Italy, 56% from 54% in Germany and 89% from 73% in France.
“UEFA has historically said that a salary / income ratio of 70% should be the upper limit that clubs should aspire to, but we may see some big clubs surpass that figure and possibly even exceed 100% in the short term. ”Sam Boor, a head of Deloitte’s sports business group, told Reuters in April.
Even before the pandemic, the ratio of wages to earnings in the Championship, England’s second division, was already 107%, he said.
VALUE
The combined value of the top 32 European teams has grown more than 50% since 2016, according to the Football Benchmark team at the accounting firm KPMG, which examines the global “business value” of clubs: the equity of their owners, plus total debt minus cash.
The increase was driven by an aggregate 11% annual increase in total operating income. The main thing has been the 65% increase in broadcasting revenues that the clubs obtained between 2016 and 2020, and the 22% and 39% of average revenue per match and commercials.
Olympique de Lyon has experienced the highest individual growth during that period, 193%. Tottenham Hotspur has risen 158%, going from 800 million euros to just over 2,000 million, while Manchester United and Barcelona have experienced increases of 15% and 16%, reaching some 3,300 million and 3,200 million euros.
THE HIT OF COVID
Europe’s top 20 clubs generated 8.2 billion euros ($ 9.9 billion) in revenue in the 2019/20 season, according to Deloitte’s annual report on soccer leagues.
The figure was less than the 9.3 billion euros in the 2018/19 season, and although it is partially distorted by the fact that Covid-19 caused some transmission revenues to be delayed until the following accounting year, the pandemic will cost those 20 clubs more than 2 billion euros in lost revenue at the end of this season.
The figures also show that the dozen clubs in the failed “Super League” plan this year generated just over 5.5 billion euros ($ 6.48 billion) – 67% – of the 8.2 billion the previous year.
DEBT
Many clubs now have significant debts due to the cost of buying players and building or improving stadiums.
KPMG estimates that England’s Tottenham Hotspur, which just built a new stadium, had the highest global cargo, at € 685 million (£ 595 million) as of 2019/20, after discounting things like transfer fees that they are still due to other clubs.
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They are followed by Manchester United and Juventus, with 524 million and 390 million euros of debt respectively. Barcelona and Real Madrid had 318 million and 170 million euros. German champions Bayern Munich had no obligations, and clubs like Paris Saint-Germain and Chelsea, on the surface at least, have more cash on their books than interest-bearing loans.
Others argue that those numbers don’t show the whole picture, as some super-wealthy club owners make interest-free “soft loans” that don’t always count.
Deloitte estimates Chelsea’s debt would be 1.3 billion pounds and the highest in the Premier League if owner Roman Abramovich’s “soft loans” were included.
The firms also estimate that the accumulated net debt held by Premier League clubs reached a record high of nearly 4 billion pounds (5.56 billion dollars) in 2019/20, up from 3.5 billion in 2018/19 and 2.9 billion pounds. from 2017/18.
Debt accounted for 88% of combined Premier League revenue, up from 67% the previous season, still less than in the 2008/09 season, when £ 3.3bn debt accounted for 167% of revenue. .
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