The business of football: Are wages affordable?


In the past few weeks, the financial sustainability of football clubs has become a much-discussed topic once more. This summer, Paris Saint-Germain FC stunned the market with the record-breaking transfer of Neymar for EUR 222 million, more than twice the price tag paid by Manchester United FC for Frenchman Paul Pogba one year earlier. While many pundits started to question whether such profligacy can be sustainable in the long-term, UEFA President Aleksander Čeferin recently advocated a more balanced competition, hinting at potential reforms that would include a salary cap, luxury tax, squad limits and transfer uplift in order to “protect the magic of football”. With the aim of throwing some light on this topic, the KPMG Football Benchmark team compares operating revenues and total staff costs for the big-five leagues over the past five seasons.

If we give a look at the aggregate figures for each country, results are incontestable: starting from the 2011/12 season, all the big-five leagues, namely the English Premier League, Spanish LaLiga, German Bundesliga, Italian Serie A and French Ligue 1, have grown operating revenues (net of transfer proceeds) in excess of total staff costs.

It comes as no surprise that the broadcasting receipts for the period 2013-2016, which were 70% up on the previous cycle, sent the English Premier League total operating revenues some 76% higher, the most dramatic rise among the leagues under analysis. Thus, despite the simultaneous 56% increase in staff costs during the same timeframe, English top-flight clubs benefitted more than their counterparts in other leagues did.

While Ligue 1 has the second best difference between revenues and cost increases (29% vs. 19%), the Bundesliga has both the second highest revenues (45%) and total staff costs growths (41%). While in the German market media rights have increased significantly, Bundesliga clubs also benefitted from the highest impact of commercial income on total turnover (46% in the 2015/16 season). Indeed, thanks to the presence of a European superpower such as FC Bayern München and by the successful results achieved by the national team at both senior and junior level, the entire German first division enjoyed greater visibility that has translated into remunerative sponsorship agreements, successful merchandising, branded stadiums and other benefits.

On the other hand, LaLiga and Serie A recorded lower aggregated results. The Spanish top-flight switched to a more lucrative and centrally-distributed cycle starting from 2015/16 season, which helped to generate a positive result over the past five seasons. Instead, Italian football witnessed an extremely narrow result which may serve as a warning in view of the upcoming negotiation of a new media cycle.

A closer look at some prominent clubs provides some interesting insights on a topic that often prompts heated debate. We have analysed the operating revenues and trends around total staff costs of the 11 most valuable clubs[1], in the same timeframe.

Out of this sample of 11 clubs, seven disclose a revenue increase that outpaces the rise in staff costs, two score an ex-aequo and two score a negative result.

All the Premier League clubs, except Chelsea FC, stay in line with the overall results by aggregate figures; Liverpool FC display the highest growth by both metrics, while Manchester City FC have the most positive result. Furthermore, Italian champions Juventus FC and French giants Paris Saint-Germain FC also join this cluster of clubs, as their ability to leverage their revenue streams outperforms the increased remuneration of the staff.

Chelsea FC and FC Bayern München represent two halfway examples: both clubs do not show any major difference in their performance, as turnover and staff costs grew at the same rate.

The two worst performers over the past five seasons are the Spanish giants, Real Madrid CF and FC Barcelona. Despite stable domestic and international on-pitch success and in contrast to their league’s trend, both clubs suffer from increased staff costs outperforming turnover. While this did not affect year-end profitability in any of the seasons under analysis, this result might be a potential wake-up call for the leaders of LaLiga.

In conclusion, the results discussed above show how, regardless of the ever-inflating costs associated to players and staff, the biggest European leagues and the most prominent clubs seem to be in a position to sustain this trend. Perhaps surprisingly, however, there is a common factor among the poorest performers: Real Madrid CF, FC Barcelona, Chelsea FC and FC Bayern München, indeed, are the four winners of the UEFA Champions League trophy from the five seasons under consideration. Winning comes at a cost, and eventual bonuses or contract renewals awarded might have a stronger impact on a club’s books than any success achieved on the international stage.

Further investigation into this and related topics, as well as analysis of industry data, can be undertaken for you by KPMG Sports Advisory Practice. Our subject matter experts can also assist stakeholders in assessing and interpreting the potential impact on their organizations of any particular piece of research, identifying the underlying reasons behind specific trends or developing possible solutions and considering future scenarios.


[1] According to KPMG “Football Clubs’ Valuation: The European Elite 2017”.