When Russian oligarch Roman Abramovich took over Chelsea Football Club in 2003, it was a ground-breaking deal – worth £140m and the first time a Premier League football club had foreign ownership. Twenty years later, 75% of the English Premier League’s clubs have some form of overseas ownership. Half are owned by corporate investors, private equity firms and hedge funds – and, in the case of Newcastle United, a Saudi sovereign wealth fund.
‘The professional advice around the game is better than it’s ever been’
This isn’t surprising when you consider the mass popularity of the English and European top leagues around the world, and the huge sums of investment and returns involved. According to data from Sportslens, the brand value of the Premier League in 2022 was €8.6bn.
Behind these buyouts, sponsorship deals and financial management are, of course, the professional accountants. The larger firms have been advising on the running of clubs for many years. In fact, Deloitte’s Football Money League and Annual Review of Football Finance, KPMG’s Football Benchmark (now run by ACE Advisory) and BDO’s Football Finance Directors Report are well known among accountants and fans alike.
League values
€8.6bn
Brand value of the English Premier League in 2022
€44bn
Premier League clubs’ total revenue: more than all Bundesliga (German) and La Liga (Spanish) clubs combined
£5bn
Premier League’s latest broadcasting rights deal with Sky Sports, BT Sports and Amazon Prime Video
€17.2bn
Record aggregate revenues of the big five European leagues in 2021/22, outperforming the pre-pandemic benchmark of €17bn set in 2018/19
7%
Growth of European football market, to €29.5bn, over the 2021/22 season, due to record match-day and commercial revenues
Sources: Statista and Deloitte’s Annual Review of Football Finance
‘The professional advice around the game is better than it’s ever been,’ says Dan Jones, former head of Deloitte’s UK Sports Business Group and now an independent consultant. ‘There are people at the firms who are fully immersed in the world of football finance and think about nothing else. Their insights and services are proving invaluable for clubs as the landscape continues to change.’
Expanding service lines
The firms’ repertoire of services is growing as clubs look to expand their reach and financial potential under new owners. Advice on buyouts, valuations of players, clubs and academies, regulatory compliance, broadcasting rights, management of property portfolios, fee negotiations and inward investment opportunities are some of the key services the firms provide. But there are many more spin-off activities.
‘We’ve noticed that CFOs are increasingly involved in sponsorship investment decisions’
‘We’ve just launched a new offering where we help clubs evaluate the naming rights for their stadiums,’ says Hubert Tuillier, manager, sports advisory, at KPMG. ‘They need financial experts to help them negotiate with potential partners. We’ve noticed that CFOs are increasingly involved in sponsorship investment decisions. These are long-term contracts involving large sums of money, so they need consultants who speak their language.’
Non-fungible tokens (NFTs) is also a growing area where the firm is offering support. ‘We assist clubs in the development of NFTs, which allows them to engage with communities and secure transactions between club and fans, and between fans themselves,’ says Tuillier.
Regulatory role
Compliance with the slew of new regulations and rethinking financial management within the new parameters is also big business for advisers.
UEFA’s Financial Sustainability regulations (FSR) replaced Financial Fair Play (FFP) rules last year. The FSR raised the limit of permitted losses to €60m across a period of three seasons (including an additional €10m grace for those in financial good health). There is also a new salary cap on squad costs, with clubs restricted to spending a maximum of 70% of total revenue on squad salaries, transfers and agent fees.
‘The focus is shifting to ensure long-term financial sustainability across the football system’
Although the overall European football market grew by 7% in the 2021/22 season, many clubs are still in a loss-making position, according to Deloitte’s latest Annual Review of Football Finance.
‘Operating profits in European football have declined by €1.8bn since 2018/19, so it’s clear that overall recovery is still a work in progress,’ says Tim Bridge, director, sports business group, Deloitte. ‘The focus for all clubs is now shifting to ensure long-term financial sustainability across the football system.’
Multidisciplinary approach
However, those clubs that are doing well are doing very well indeed, and their need for advisers across the range of financial opportunities means the firms increasingly need to take a multidisciplinary approach.
‘As the lines of demarcation between sport, media and entertainment continue to blur, and a number of new investors are sweeping into sport, it’s all the more important to work closely with teams from across the firm to ensure that we are sharing our market expertise,’ says Bridge.
For example, Tuillier works with KPMG’s CSR teams to address social initiatives, the real estate asset management team regarding the property portfolio, and even travel services.
Despite this growth in ancillary services, some of the clubs’ own finance teams like to keep certain operations inhouse.
‘I wouldn’t have the advisers doing data analysis of players or valuation of academies and that side of things’, says Steve Kavanagh FCCA, CEO of Millwall Football Club. ‘Surely the clubs can do that themselves. I think the firms are cleverly pushing themselves into spaces, and people are quick to spend money in football.’
