The 2020/21 Financial Report on the Champions of the Top 7 European Leagues

KPMG, a consultancy agency, specialising in financial audits, has released their yearly report on the finances of the Champions of the top football leagues in Europe. The document, which analyses the finances of several clubs, details the financial struggles that most clubs have been going through, including the tremendous losses registered by Atlético Madrid and Internazionale Milano, but also Manchester City and Bayern’s numbers regarding operating revenues and profitability.

According to the report, the English champions, Manchester City, who are yet to release detailed information on profitability figures, lead the table in operating revenues. With €644.2m in revenue, the Citizens increased their earnings by 17% compared to their 2019/20 campaign. In addition, they also top the table for the highest net transfer spends on aggregate over the transfer windows, with €294m spend. In City’s case, it is particularly interesting to see how the impact of such transfer had on their competitive levels, with the club winning their 5th Premier League title last year. In the 2021/22 season, they are also strong contenders as Premier League title odds price them to win the league for a second year in a row at odds of 1/33.

Bayern registers profit for the 29th year in a row

The 2020/21 season marked the 29th year in a row in which FC Bayern, the current German champions, finished the season with a positive financial balance. While their €1.8m profit may seem insignificant at first sight, looking at the big picture of European football it is easy to understand how relevant these numbers are. Not only were they the only champions to have profit, but they did so while winning back-to-back league titles, something which no other club managed to do. This is particularly relevant, as football clubs often claim that the only way to remain competitive is by investing more than they are making. Take Barcelona as an example, the Catalan club registered a massive €481.3m loss and finished 3rd just two points ahead of Sevilla in 4th.

However, these numbers aren’t the only thing that distinguishes the Bavarian club from the other seven. Their spending strategy is radically different as the club spends only 58% of its operating income on paying employees (players and coaching staff).

None of the other Champions can beat this figure. Lille, the worst in this regard, spends 106% of its operating income on employees, with Sporting, the Portuguese champion, using up to 97% of its operating income to pay employees. Manchester City does not have full data released, but it isn’t hard to imagine that the club’s salary policy can’t compete with Bayern’s results. Internazionale and Atlético de Madrid currently spend 75% and 76% of their operating income on employees, respectively.

Internazionale and Atlético top the list for highest losses

The recent destabilisation of transfer values and losses related to matchday revenues have seriously hurt most clubs in the football industry, but out of the seven analysed by KPMG, Internazionale Milano, recorded the biggest losses of the season, amounting to a total of €245.6 million. This figure is a record in Italian football and was reflected in a sharp decrease in net transfer spending, which reduced from €125m in 2019/20 to €38m in 2020/21.

On the list, Inter is followed by Atlético de Madrid, who accounted for the second-highest annual losses (€111.7 million).

This is particularly surprising given that, in the 2019/20 season, the club had a loss of €1.8 million. The 109.9 million loss increase comes as a result of the drop in revenue from player transfers.

Ultimately, these numbers help illustrate the need for European football to find balance in their spending policy, but most importantly to improve their financial strategies and how this can benefit their competitive levels.

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