Which club will be the first to reach one billion in revenue?


Real Madrid 831, Manchester City 826, Paris Saint-Germain 802, Barcelona 800, Manchester United 746, Bayern München 744. These are not just arbitrary figures; these are the operating revenues, in millions of euros, achieved last season by the top-tier clubs in the world football economic ranking. These powerhouses have consistently dominated the economic landscape of the sport, alternating positions on the podium over the past two decades, turning football into an unparalleled money-making machine. All of them, leaving behind the pandemic emergency, set their revenue records in 2022/23, except for Barça, which had already reached €841 million in 2018/19. The question now lingers: which of these juggernauts will be the first to break the billion-euro barrier?

Just a few years back, a highly exclusive group of clubs had their sights set on this lofty ambition, only to find their plans abruptly derailed by the onset of the Covid pandemic. Yet, with football's engine roaring back to life at full throttle, we find ourselves witnessing a resurgence. Four clubs now proudly boast operating revenues surpassing the €800 million mark. It's crucial to note that these revenues, net of player trading, typically stem from three primary sources: stadium, TV rights deals, and the commercial sector. But what lies ahead? To shed light on this intriguing narrative, Timothy Bridge, partner at Deloitte's Sports Business Group, explains:

"The high demand for live sports predicts further growth, especially in commercial and matchday revenues. Since clubs seem unable to rely on exponential growth in TV rights revenues anymore, creating a business model more focused on the commercial side will allow them to gain greater control over their financial stability. This may include developing new merchandising or non-match-related events, such as concerts, to create new commercial offerings. Thus, in the coming seasons, European clubs may seek to further diversify their revenues to gain control over a greater share of their total income".

Broadcasting rights, a critical revenue stream for football clubs worldwide, are collectively sold everywhere: national leagues handle the sale of rights for their respective championships, while UEFA takes charge of European cup competitions. Consequently, clubs have limited control over this lucrative aspect of their business. It's no mere coincidence that some clubs had contemplated the creation of a Super League, precisely to take charge of managing media licenses for international competitions. This move aimed to challenge UEFA's monopoly, a challenge that remains relevant in light of the European Court of Justice's intervention, with the full repercussions yet to unfold.

Turning to the specifics of national tournament TV rights, the English Premier League have sold domestic licenses until 2029, albeit with a modest 4% annual increase. Serie A, on the other hand, faced a setback with a 3% decrease, while Ligue 1 opted for private negotiations. Meanwhile, the German Bundesliga is gearing up to explore the market, and LaLiga's contracts are set to expire in 2027. In essence, top clubs are not banking on significant windfalls from this revenue source, at least not within the current governance framework. Instead, attention is squarely fixed on bolstering infrastructure and exploring alternative revenue streams.

Real Madrid in pole position with the Bernabéu

Several elite clubs are making significant strides in stadium development, with Real Madrid and Barcelona leading the charge. Where once the iconic Santiago Bernabéu and Camp Nou stood, sprawling construction sites now signal the inception of ambitious projects: the former valued at over €1.1 billion, and the latter, encompassed within the grand Espai Barça initiative, valued at a staggering €1.5 billion.

The unveiling of the futuristic Bernabéu stadium along the illustrious Paseo de la Castellana is imminent. Based on the report ratified at the latest shareholders' meeting, Florentino Pérez, Real Madrid's President, aims to host a minimum of a hundred events in the latter half of the 2023/24 season. Financial projections indicate stadium revenues to soar to €317 million in the financial year ending June 30, 2024, compared to €140 million in the preceding season. However, the exact adherence to this roadmap remains uncertain.

Nevertheless, it's merely a matter of time. Once fully operational, with all its cutting-edge features in play, the revamped Bernabéu is poised to churn out revenues of at least €400 million annually (with the most optimistic forecasts soaring to €440 million), along with over 200 additional events each year. Excitement peaks as plans for the NFL's inaugural landing in Spain, set for Madrid in 2025, further underscore the venue's potential.

The club have already inked a deal with Sixth Street/Legends for the management of a portion of the stadium's commercial activities, in exchange for an initial injection of €360 million. With Real Madrid's revenue already reaching €831 million last year, the rejuvenated Bernabéu promises to propel them toward the billion-euro mark by 2024/25. And with the imminent arrival of Kylian Mbappé on the horizon, the Blancos' financial fortunes appear even more promising.

Barcelona, the other major project

Barcelona is hot on the heels of Real Madrid's stadium renovation endeavors. Although completion of the renovation works isn't slated until 2026, there's anticipation that the new facility could see partial use as early as November 2024. Nevertheless, this year presents a temporary setback for the Blaugrana as they relocate to Montjuic, resulting in an estimated loss of about €80 million in revenue.

Once the renovations are finalized, Espai Barça is forecasted to yield an additional €250 million in annual revenue. This revenue breakdown is expected to comprise 24% from sponsors and naming rights (with an agreement already secured with Spotify), 24% from hospitality services, 22% from ticketing and catering, 15% from museum and tours, and 15% from hosting events. It's true that Barcelona's commercial revenue, stadium aside, is expected to grow (+8% in 2023/24), however, it should be remembered that Laporta's club have activated several financial levers to deal with excessive indebtedness, including the sale of 25% of future broadcasting revenues for the next 25 years. Therefore, in the coming budgets, the TV rights item of the income statement will be slightly lower than it should be.

The situation of Manchester City and Paris Saint-Germain

Expansion projects are also on the table for the two Manchester clubs and Paris Saint-Germain, clearly with longer timelines. Manchester City and PSG, the two teams fueled by petrodollars, have climbed the financial ranking by focusing on increasingly lucrative sponsorship deals, particularly with entities close (or contiguous) to their respective ownerships. The reality is that this item has now reached €400 million, which is half of their revenues. It's much more complicated to increase matchday revenues, which last season amounted to €83 million for Manchester City and €153 for PSG. This is where the potential lies now. In July, Manchester local authorities approved a £300 million expansion plan for the Etihad Stadium, adding 7,900 seats for a capacity exceeding 60,000 and the construction of a hotel and another building. The work should be completed by the end of 2026.

In Paris, however, things are heating up. President Al Khelaifi threatened to leave Parc des Princes after Mayor Hidalgo refused to sell the stadium to the club. The acquisition of the facility is considered an essential step by PSG to then realize the expansion project to 60,000 seats (from the current 48,000). But negotiations with the Municipality of Paris have never taken off. And now the Qataris are studying alternatives in the capital region.

Manchester United and the Ratcliffe factor

Returning to Manchester, on the “red side” of the city, the English Premier League have recently approved the acquisition of 25% of the club by Jim Ratcliffe, who has pledged to personally invest €280 million in infrastructure. Old Trafford, which generates £150 million in revenue, has long needed a facelift, but the plan is even more ambitious: to build a new 90,000-seat facility, clearly with a share of bank financing. If the Red Devils could have a modern and multifunctional stadium and consistently return to the Champions League, they would undoubtedly break the billion-revenue barrier. Consider that the €746 million in 2022/23 came solely from participating in the UEFA Europa League.

But it will take time. In any case, the stadium is the main lever to increase the turnover of the top clubs. The other push will come from international competitions, which are destined to become increasingly relevant. Meanwhile, the new format of the UEFA Champions League with 36 teams will offer a 25% increased prize pool from next year: this means, for top clubs, a minimum income of €60 million. Then, in 2025, there will be the first edition of the new Club World Cup, with a guaranteed prize of €50 million. In this case, these are entirely incremental revenues (the last edition, in 2023, offered €5 million to the winner). But they will be non-recurring revenues because the FIFA-endorsed mega-tournament will be held every four years.