Deloitte 2010 money league: Chelsea 6th.

It`s the time of the year when Deloitte publish their annual report on football finances, the Football Money League. The report contains a wealth of information on the state of football`s cash. We look at the report over two days. Today we`ll have a look at the general state of the game. Tomorrow we`ll have a look at the particularities for Chelsea.

Every year Deloitte publishes its Football Money League report, and the 2009 vintage has just been released. It examines the finances of the top 20 clubs in the world. Just the list itself makes for interesting reading.

It has to be stressed that the report looks only at each club`s revenues, divided into matchday, broadcasting and commercial sectors. Excluded from these calculations are player transfer fees. Also significant to mention is that the report examines the revenue side only, there is a different accounting examination (not to mention a different classification of the top 20 clubs) should costs be examined, or even the balance. We tried to examine some of these aspects last week in assessing a Spanish report entitled Football Transfer Review.

All dates mentioned refer to the timeframe of the study, i.e. 2008/2009. As was largely reported this was the year when the top two spots were occupied by the two Spanish giants, Madrid and Barcelona. Barcelona overtook Manchester United, who were previously in the second spot.

This represents a remarkable growth for both clubs: Madrid grew 9,7% year on year, whereas Barça grew 18,5%. The latter`s extraordinary progression is a reflection of the fact that Barça enjoyed the most successful season ever in a club`s history, winning 6 trophies. But in both cases, the main driver of growth is the particularities of broadcasting rights in Spain: each club negotiates its own deal. This has skewed revenues even further towards the top two sides in Spain: Madrid earned €160,8 million in broadcasting alone, Barça 'only` €158,2 million. Both clubs entered the first year of a new deal with their respective broadcasters, and this alone has seen a jump in their revenues. What is also worrying is that the timeframe of this study is outside the return of Mr Evil himself, Florentino Perez, to Real Madrid. The next year is likely to see another jump in Madrid`s revenues from all the sales of Cristiano Ronaldo shirts.

Before we examine the rest of the table, it`s worth considering how uncompetitive the Spanish Liga is. For all the guff about the Liga being the best in the world (it isn`t, statistically), it`s a sombre fact that Spain has the top two representatives in this table … and nobody else. There is one other club in the next 10, Atlético Madrid, 22nd side, on €100 million. In other words, Madrid earns around 4 times more than any club other than Barça, and both sides make more than half as much again in broadcasting alone than Atlético`s total revenue. This is not only a question of Champions League placings, it`s a reflection of the unfair broadcasting practices whereby each club negotiates its own deal, thereby raking in money for the top two clubs.

Apparently this year`s Liga is one of the most exciting in years, with Madrid and Barça neck and neck at the top, separated only by goal difference. That excitement sounds rather hollow if you aren`t a fan of either of the two clubs: the gap between the top two and the club in 3rd spot (Valencia) is 15 points. Right now Spain is about as competitive as Scottish football, with two clubs lording it over the other 18: it is likely that the revenue of the Barça - Madrid duopoly is more than that of the next 18 sides.

Overall, the top 20 sides saw a total revenue if over €3,9 billion. This is a mere €26 million increase on the past exercise, which is a reflection of the economic crisis. In fact, 9 of the top 20 clubs actually reported a decrease in revenues. Overall, clubs in Europe managed to maintain audiences in the stadium, but often at slightly reduced prices. Most clubs in the UK, for instance, froze their prices this season, which represents an absolute drop in matchday revenue. In addition, it has been difficult to attract those high-rolling corporate fans in the current climate. Broadcasting revenues have not changed significantly, as most contracts are multi-year. If anything, these revenues have increased for some lucky clubs who have entered new contracts. Commercial revenues, however, are hard to maintain in an economic crisis.

Elsewhere, one has to report that the entrants to the money League come from 5 countries only: the above-mentioned Spanish duopoly, 7 English sides (one more than last year), 5 German clubs (same as last year), 4 Italian clubs and 2 French ones. Last year there was an interesting arrival from a different League, with Fenerbace making an appearance. This year, all has returned to order, with the only difference in the clubs being the new entry of Manchester City and Werder Bremen taking the place of Vfb Stuttgart.

The seven English sides are the big four, supplemented by Big Club Tottenham, Man City (as mentioned already) and, bizarrely, Newcastle. The Barcodes might have to face the prospect of dropping out of next year`s edition: the exercise ended at the end of the 2008/2009 season, when Newcastle were, sadly, relegated. In the process, however, Newcastle manage to lose some 20% of their revenues year on year, making only the 20th spot (down from 17th last year). And it will be a lot worse next season.

Looking at the English clubs, ManYoo appear in 3rd place, with a slight increase in revenues (just over €2 million to €327 million). Arsenal are now in 5th, despite a drop in €1 million in revenues. They overtake Chelsea, now in 6th, whose a worrying drop of €24,6 million. We`ll come back to that tomorrow. Man City`s appearance is in 19th place (€102,2 million), Spurs lost over €12 million (and one spot) down to 15th. A key factor in this is the collective nature of broadcasting rights in England and the loyalty of fans who fill out stadia in England: in the next 10 clubs there are a further 3 English sides (Everton, West Ham, Aston Villa).

As has also been widely reported, one of the main factors in this decline in the revenues of a number of English clubs has been the slump in the value of the British Lira, sorry pound sterling. The pound dropped some 21% in value relative to the euro between 2007 and 2009. It is a sombre thought that, had sterling stayed the same as it was in mid-2007, ManYoo would be the richest club in the world. Arsenal would also be 4th, and Chelsea 5th. Despite this, and despite absolute as well as relative decreases in English clubs, the fact of 7 making the top 20 is a tribute to the health of our League. It is also a suggestion of our League being a bit more competitive: at least we have 4 big clubs, and after Liverpool (€217 million in revenue, €10 million up on the season before), there are some other bigger sides: Spurs, Man City, and Newcastle are not completely overshadowed with €132 million, €102 and €101 million, respectively.

In other Leagues, it is interesting to see German football holding up. Bayern actually lost money (some €6 million) but stayed in fourth spot with €289 million revenue. Hamburger SV are 11th, up 4 places (and €19 million) to €146,7 million. Schalke, however, drop 3 places and €24 million to €124,5 million. Borrussia Dortmund also lost 4 million but manage to rise 2 places to €103 million. There is only one other German side in the top 30 (Stuttgart). Is this a skewed League?

Italian football is showing a decline. Juventus actually rise 3 places to 8th and somehow made an additional €35 million to €203 million. In fact this is a catch-up after their relegation for match-fixing scandals, and their return to the Champions League last season (an appearance that was cut short by Chelsea). Inter also increased €24 million, and one place, on €196 million. Is that the José factor? Milan, however, drop 3 places and €13 million to €196 million after a very mediocre season. The fourth Italian representative, Roma, lost €32 million and 3 places to €146,4 million. What is perhaps indicative is that there are a further 2 sides from 20-30: Napoli and Fiorentina. Italian football is therefore one of the more evenly distributed Leagues.

Lastly, France. The top French side continues to be Lyon, who contrived to lose €15 million and one place to 13, on €139,6 million. This was a halt to what appeared like an inexorable rise in Lyon, who won 7 successive Leagues and became the only French side making inroads to the Champions League. Last season, however, Lyon did not top the table. This is reflected in the drop in their revenue. Just below them, on €133 is Olympique de Marseille, who also increased their revenue €7 million (after a couple of disastrous seasons) and 2 places up the table. Below these two, we can mention that PSG are on €100,8 million, and last season`s French champions, Girondins de Bordeaux, are on €99,8 million. The French League is therefore one of the more competitive ones.

The list of these 20 clubs, with the notable exception of Newcastle, demonstrate the revenue-generated importance of the Champions League: they are all clubs that are expected to appear in the latter stages of the tournament, year after year. The effects of currency slides are a blow to English football, but football as a whole appears to be weathering the crisis. That, however, is somewhat distorted by the particular state of both Madrid and Barça: had these two not been in the table, European Football would be reporting an overall loss from last year.

Tomorrow we`ll have a look at the breakdown of figures for Chelsea, as well as our rivals in England.

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