The rich list: where do Football clubs get their money from?
Manchester United are one of the richest clubs in the world, so why are they so intent on cutting costs?
Sir Jim Ratcliffe raised eyebrows (and tempers) when he tried to defend the steps being taken by the club to address their current financial situation. His remarks were part of an interview conducted with Gary Neville, a former player, coach and now respected pundit. The interview is linked here
Manchester United are currently taking a range of steps to cut expenses. Long standing staff have been relieved of their duties. The staff who remain have been asked to pay for their lunch, something that was once a perk of the job. As part of Mission 21 the club are trying to improve the efficiency of their roster through loaning players unlikely to be selected under the current management and improving the availability of those who remain. Neither Mason Mount nor Luke Shaw have played in 2 years despite being senior players with salaries to match. These measures may, to the casual observer, suggest the club is struggling to generate revenue. Nothing could be further from the truth. When compared to other English and European clubs, Manchester United are very much at the top of the rich list.
Just how rich are English Clubs?
Much is made in the media of how clubs spend their money with a focus on the cost of player transfers. Less attention is given to where their revenue comes from, aside from the value of broadcast deals when each new round is negotiated. The answer is perhaps out of kilter with what the faithful fans, as Sir Jim Ratcliffe describes them, want to hear.
The
reported the revenue for Premier League clubs and those in the English Championships (the second tier of the league structure in England) for season 2022/23. £572 million separated Manchester City (£713 million) and Bournemouth (£141 million), the top and bottom earning clubs in the Premier League. Manchester City won the league, Bournemouth finished 15th, avoiding relegation by five points. The teams that finished below Bournemouth and the differential in revenue were Nottingham Forest (£14 million); Everton (£31 million); Leicester (£36 million); Leeds (£49 million); Southampton (£5 million).The top earning team in the English Championship was Norwich City with £76 million in revenue, £637 million less than Manchester City and £65 million less than Bournemouth. The team with the lowest revenue was Preston North End at £16 million. Preston finished 12th and Norwich 13th.
What about on the world stage?
Each year Deloitte publish their league of ‘Money Clubs’. A list of clubs who generate the highest revenue globally (most recent report linked here https://www.deloitte.com/uk/en/services/financial-advisory/analysis/deloitte-football-money-league.html). Last season (2023/24) made history when Real Madrid reported revenue that exceeded 1 billion euros. Of the 20 clubs with the highest revenue, nine compete in the English Premier League. Manchester United, despite defending the need to cut costs, are ranked fourth with a revenue of 770.6 million euros.
So where does this revenue come from?
Over the past five years the revenue clubs receive from match days has remained relatively stable. This makes sense. Most clubs in the top flight consistently record attendances above 95% of their stadium capacity. Revenue from broadcasting deals also remained stable. The current broadcast deal for the Premier League runs until 2029. The gap in revenue that has developed between clubs is largely the result of their commerciality and business acumen off the pitch.
Real Madrid were able to increase their commercial revenue through the addition of new infrastructure as part of their stadium redevelopment. FC Barcelona, currently ranked 6th in the league of the world’s richest clubs will be hoping to do the same as they redevelop the Camp Nou. Clubs with the highest commercial revenue have signed players who have a global brand allowing them to bolster their market share of retail in club merchandise. I can’t count the number of Inter Miami and PSG replica strips I have seen in Sydney. The children who wear them do so because of their interest in Messi and Mbappe rather than the clubs they represent. Commercial revenue also includes sponsorship and the use of stadia for secondary purposes such as events like concerts and conferences. Stadium activation and the resultant commercial opportunities is central to the redevelopment of St Andrews, the home of Birmingham City, by Tom Wagner of Knighthead Capital.
It is this that makes some of the comments made by Sir Jim Ratcliffe so perplexing. When asked by Gary Neville whether the club would increase season ticket prices next year he responded in the affirmative. Sir Jim Ratcliffe commented that his direction to management was to look after the faithful fans, those who attend the games, have purchased season tickets and his words, want to watch the team irrespective of the prestige of their opponent. This seems odd. The teams who bring in more revenue than Manchester United do so via commercial not match day income. Manchester City brought in $47 million more commercial revenue than their cross city rivals in 2024. Those who buy replica strips, subscribe to Manchester United TV, sponsor the team or attend conferences and concerts at Old Trafford hold the keys to bridging the gap with Manchester City. Few of these people would be regarded as 'faithful fans’ using the criteria of Sir Jim Ratcliffe.
The revenue reported for the teams in Deloittes report to many outside the top European leagues will appear eye watering. The quantum of revenue may be even harder to fathom for clubs in different sports outside American Football, Baseball, and Basketball. It is also why Manchester United Fans are so incredulous at the teams performance. How can a club who are fourth richest in world football be performing so badly? The answer is multifaceted. Mismanagement plays a part, high turnover of managers, staff and players has played a role as does the way it spends the revenue it makes. What is unlikely to explain the slump in form nor balance the books is the fact that staff were receiving free dinners or former players benefited from a fund totalling £40,000.