Uefa: Polarisation between elite and the rest is accelerating
By Jonathan Rest
Aleksander Ceferin, the president of Uefa, has once again expressed concern over the growing financial divide between European soccer's elite and the rest of the clubs on the continent.
Clubs are earning and spending more money than ever before, according to Uefa's European Club Footballing Landscape that analysed the 2016 accounts of more than 700 teams.
Revenues among those clubs totalled €18.5 billion ($22.7 billion), up from €16.9 billion in 2015, with combined operating profit hitting a high around €790 million, despite record outlays on transfers and wages.
Such is the English Premier League's dominance that its 20 clubs earned more in 2016 than all 597 clubs from Uefa’s 48 smallest markets (i.e. all except France, Germany, Italy, Russia, Spain and Turkey).
English clubs generated an average revenue of €244.4 million each, the highest in Europe, largely due to substantial broadcast revenues, but also spent the most on wages, at an average of €153.9 million per club, more than double Germany, the next-highest payers.
Spanish giants Barcelona had the highest wage bill of any club, at €372 million.
Across the continent, Uefa found gate receipts to be up seven per cent, sponsorship and commercial revenue up 59 per cent, television revenue up 64 per cent, transfer income up 105 per cent and Uefa prize money and solidarity payments up 106 per cent.
Players' wages increased by 8.6 per cent, slightly below revenue growth, with salaries representing 62 per cent of clubs' net costs.
The Uefa report cited the 12 largest European clubs - English sextet Manchester United, Manchester City, Arsenal, Liverpool, Chelsea and Tottenham Hotspur, Spanish pair Barcelona and Real Madrid, Germany's Bayern Munich and Borussia Dortmund, Juventus of Italy and Paris Saint-Germain of France - as the drivers of much of the revenue growth, but warned of the implications on Europe’s competitive balance.
In his foreword to the report, Ceferin writes: "Once more, we cannot help but note that the polarisation of commercial and sponsorship revenues between the top tier of clubs and the rest is accelerating. The top 12 ‘global’ clubs generated a dramatic increase in commercial and sponsorship revenues of €1.58 billion in six years – more than double the increase of all other European top-division clubs combined.
"As the guardians of the game, Uefa must ensure that football remains competitive even as financial gaps are augmented by globalisation and technological change."
Those 12 aforementioned clubs have generated an increase of €1.58 billion in income from their sponsorship deals and commercial activities over the last two business cycles (2010-2016), more than double the increase for every other top-tier club in Europe combined.
The Uefa report also found that Austria has the most equal distribution of broadcast money, with the top club earning 1.2 times the median club. England is next with 1.3, Germany at 2.3 and France at 2.4, with Italy at 3.3 and Spain at 4.1. The widest gap, at 14.9, is in Portugal, where clubs negotiate their own TV deals, allowing the country's 'big three', FC Porto, Benfica and Sporting Lisbon, to cash in.
Television deals in the six biggest leagues (England, Spain, Germany, France, Italy and Turkey) generated 11 times the revenue of those in the other 48.
Ensuring a competitive balance in European soccer has been Ceferin's mantra since he was elected Uefa president in September 2016.
Early last year, the Slovenian administrator admitted that Uefa could introduce "luxury taxes" to prevent leading European clubs from “hoarding” the top talent and becoming even more powerful, while he told the general assembly of the European Clubs Association, the body representing the top clubs across the continent, in September: “Let’s put our cards on the table and be honest with ourselves: the biggest challenge over the next few years will be ‘competitive balance’.
"How can we continue to develop football in Europe and avoid widening the huge gulf between the most powerful and the rest? That is the million-dollar question. I am a pragmatist; I am open to any practical suggestion that might benefit European football.”
Ceferin commended the ECA for being willing to discuss ideas such as salary caps, luxury taxes, squad limits and reforms to the transfer system.