Europe's top soccer clubs look set to weather economic slump

EUROPE’S TOP soccer clubs are poised to weather the downturn thanks to fan loyalty and their long-term broadcast rights and sponsorship deals, according to Deloitte’s annual Football Money League.

The early signs of this season suggest attendances are holding up well across European leagues, although several clubs are changing pricing policies to ensure their stadiums are full.

Overall attendances for the top 20 clubs are slightly up in the first four months of this season compared with the same period last year and, for eight of them, attendances have hit at least 95 per cent of capacity.

“The unique nature of the football industry will enable major clubs to be relatively resistant to the economic downturn,” said Paul Rawnsley of the Deloitte sports business group.

However, the consultants say clubs are braced for a difficult summer, when individuals and companies decide whether to renew membership. Similarly, merchandise sales are holding up well but may weaken in the summer.

“Clubs acknowledge that the economic situation is already squeezing marketing and hospitality budgets hard,” the Deloitte study says.

The future for the wealthiest European clubs is fairly healthy, boosted by an uplift in their broadcast deals, which make up more than 40 per cent of their revenues.

The English Premier League last week secured a 4 per cent increase in UK rights for the 2010-13 seasons and Deloitte believes it will strike a much better deal in forthcoming overseas rights negotiations.

Club spending is holding up, as seen by the January transfer window, but though wages are also expected to increase at the same rate as revenues, several leading clubs are becoming more flexible in their wage structures, introducing bonuses for on-pitch performances.

The Money League, which analyses revenues in the 2007-08 season, show Real Madrid, Manchester United and Barcelona retaining their top three positions.

Manchester United’s triumphs in the Premier League and Champions League last season helped to increase revenues by 21 per cent to £257.1 million (€286.7 million).

Only sterling’s depreciation against the euro prevented it from coming top.

Real Madrid revenues increased by 4 per cent to €365.8 million, even though commercial revenue declined. The club says it is budgeting for €400 million in revenues this season. – (Financial Times service)