The Financial Game

European football is perhaps the best football on the planet. Arguably although more so undoubtedly, the best players in the World ply their trade on the continent, media coverage is ubiquitous, demand to watch teams from Europe is unparalleled, desire to admire the players of the Spanish, English, Italian and German leagues is unequalled, yet, for all these demands and seemingly perfect scenarios, there is a grim truth which is underlying – the financial state of these teams. Many have a hidden financial problem, screened from fans and players, forcibly pushed to the bottom of clubs’ consciousness.

Many biased British pundits maintain that the English Premier League is the finest league in the World, with high quality players and the best fans. Despite disagreeing largely with this, it still has to be considered a possible truth, but the argument about the best league in the World will be one deliberated for the considerable future with no foreseeable conclusion. Despite it almost being unfashionable to admit, greater talent, better value for supporters money and arguably greater entertainment is available on the mainland continent of Europe, particularly in Germany and Spain, with the former’s League bringing in strict financial rules that would enable sustainable growth for the future.

This article will look at the German financial model following statistical analysis of the ailing English, Spanish and Italian games.

Financially unsustainable role models in England

With Manchester City, Manchester United and Chelsea all owned by foreign businessmen or consortiums – Sheikh Mansour, the highly controversial Glazer family and Roman Abramovich respectively, there is a highly understandable argument that these are ownerships that will not last forever – unlike fans ownership – or at least are unlikely to last as long as fans ownerships. Figures in 2010, suggested that the Glazer family’s debts were over £1.1billion, having taken out over £500million in loans to cover the cost of the acquisition of the Mancunian club.

Meanwhile, Roman Abramovich has, since his takeover in 2003, spent well over £1billion on the club – most notably and controversially on Fernando Torres and Andre Villas Boas. In 2008, the Telegraph reported that Chelsea were £730million in debt, but then Chairman, Bruce Buck said: “Our debt is not external, we don’t owe it to a bank or an insurance company, we owe it to the owner of the club who is a committed investor in the club.” Despite the complications of money, owing anyone £730 million, even if it is a committed investor, is not sustainable for the future when Abramovich is no longer around to provide a constant stream of non-returnable money.

Manchester City are losing over £7,000,000 per home game and even more for every away game. How long is it until there is a financial meltdown at the Etihad? Will the financial problems be covered up in the present, as they have at Scottish club Rangers – to be uncovered by an unfortunate future generation? Sustainable finance has to be considered now to avoid the grim reality of these unanswered questions.

Manchester City’s owner, Sheikh Bin Zayed Al Nahyan has invested massively in a number of phases of purchases as the list of World Class players at the Etihad Stadium mounts up. The wage bill has become farcical with Wayne Bridge, amongst the first wave of purchases, sitting previously sitting on the reserves bench on £90,000 per week. Recent statistics in 2010/11, have shown Manchester City made a massive £7,217,544 loss per home game, and, for every season ticket they sold, they made a loss of £3,063. Chelsea were not far behind, losing £3,200,000 per home game and £1,466 per season ticket.

The Premier League is the highest generating revenue league in the World (£1.89billion in 2008/9). If accountants did their job at clubs and restricted those who made decisions on farcical transfers (eg £35 million Andy Carroll), the Premier League would be a financially strong league. However, because the wrong people are in charge of the revenue stream, this isn’t the case.

The rare light in a dark financial tunnel for English football

From these statistics available on the internet, it shows that only four of the twenty top flight teams are in profit through ticket sales; these are Arsenal – a club who have come under fire from everyone including their own fans but have stood firmly on a financial model that has ensured sustainable growth whilst maintaining consistent positioning in the League, Manchester United, whom, if had not been taken over by the Glazers, would be a club greatly in profit had the money not been loaned to fund the takeover, Tottenham and Wolverhampton Wanderers.

Wenger’s preference to put his own philosophical morals in front of monetary use has saved Arsenal, and despite pressure which at some points has questioned his position at the club, fans have realised he is doing it in the best interests of the club.

Arsenal are perhaps a the best model to use for English Football. Despite asserting themselves as a top four club and often challenging for the title, they have done so in a more financially minded way than the other Championship title contenders. Arsenal are – reportedly – still in debt (difficult to come by recent figures and conflicting reports), but they have cut their debt by over £129.2 million in the financial half year ending 30 November 2009 which was an incredibly impressive figure whilst also posting pre-tax profits of £35.2 million over that period, and whilst an anticipated Stan Kroenke takeover has lurched by the wayside for near on a year, there is optimism that – despite the long, trophyless drought that Arsenal fans are currently enduring, their sustainable financial ways will hopefully be repaid in the future by silverware for their awareness on the financial front.

Looking ahead, our strong financial base allows us time to take a measured and diligent approach to determining the club’s direction beyond our move to Emirates Stadium and into the next phase of growth.

-Non-Executive Chairman, Peter Hill-Wood following those strong 2009 figures

Arsene Wenger’s philosophy of bringing through young players from the clubs academy has indeed been a source of controversy. As Manchester City, United and Chelsea invested heavily in foreign imported established players, the French manager frustrated many fans by not following suit and preferring to give young, also mainly foreign players (but ones that have been developed by the club) like Kieran Gibbs (England), Francis Coquelin and Emmanuel Frimpong chances in the first team whilst acquiring mainly bargain buys within the £5 – £15 million bracket with a rare exception – Andrei Arshavin. What initially seemed as an act of selfish philosophical preference has turned out to be an act of business brilliance. Arsenal sit third in the league with consistent performances coming with a settled squad embedded in a solid wage structure which may (understandably) have to be stretched to ensure the stay of talismanic captain Robin Van Persie.

Government recognition of the financial problem

Whilst researching this article, I came across an intriguing report from the House of Commons (UK Parliament) and their Culture, Media & Sport Committee website, of which an article of written evidence was submitted by Andy Green in a personal capacity.

The Evidence he provided claimed that;

Football in England has no limits on the amount of debt that can be placed on clubs and little indirect financial regulation that mitigates the impact of excessive borrowing. This is wrong. Current Premier League financial regulation is inadequate and needs strengthening.


A system of ownership that included supporters (probably through official trusts) would be more likely to provide long-term ownership and hence longer term planning horizons and greater financial stability. Supporters’ trusts would act as a break on reckless short-term borrowing and would be more likely to safeguard historic grounds for their communities.

He continued to write;

In England, owners with no knowledge of a club and its traditions can takeover, execute an aggressive and risky business plan and put up club assets as security for debt.


Significant supporter ownership cannot guarantee good governance (as the recent experience of Notts County has shown), but in conjunction with tighter regulation it can move English football into a new era of long-term financial planning and more stable financial performance.

The Committee report was an extensive document of which I was unable to read through fully. The main issues seemed to concern leverage buyout’s (LBO’s) explained
here and a desire from all submitted written pieces of evidence for Government interception to prevent a game which can “change lives” – according to one writer – falling on it’s knees.

From the selective pieces of the report I read, the Government seemed content that all sources of written contribution concluded the same about LBO’s:

In all the evidence we have received, a whole-hearted defence of the use of leveraged buyouts to buy football clubs is entirely absent. Within a football context, the leveraged buyout appears to be a particularly risky vehicle with little obvious benefit, and certainly not to supporters and local communities.

It seems as though the Government are unwilling to take a step unless an already ineffective and poorly structured Football Association take action which is highly unlikely. There is no immediate or future plans for actions and it seems that the EFA are unlikely to implement such policies at all. The Report’s 34 conclusions (in part one of the report) under each section were understanding of the fears of fans in the midst of a wave of foreign investments to the Premier League and the conclusion under the section titled “The Way Forward” wrote:

Almost all our recommendations for the reform of football governance can be achieved through agreement between the football authorities and without legislation. We therefore urge the football authorities to consider our Report carefully, and to respond positively with an agreed strategy and timetable for change. As a last resort, in the absence of substantive progress, we recommend that the Government consider introducing legislation to require the FA to implement the necessary governance reforms in line with its duties as a governing body.

Similar problems experienced on the mainland continent

It isn’t only just in England though, Europe’s top-flight clubs have reported annual losses totalling €1.6 billion (£1.3bn) according to a licensing report by UEFA in 2010 figures, reported on ESPN Soccernet on January 25, 2012, showing overall losses from the ‘top leagues’ around the continent are up 36% from 2009 where losses were £1billion. This was despite a near 7% increase in income to cover the costs, showing an unsustainable increase in spending.

The need for financial fair play measures and strong governance is strongly emphasised by the report findings.

– Part of a UEFA Statement accompanying the grim statistics

The great Spanish misconception

Barcelona, according to a Daily Mail report in 2010, reportedly took out a £125 million loan to pay their players. Since then, they have acquired David Villa (£32 million) and Cesc Fabregas (£36 million). The top two Spanish clubs are a source of confusion, they, along with Athletico Madrid are owned by their fans – also known as “socios” and are four of the forty teams in the top two division owned this way. There is a misconception that this is a good way to own a club – this is true to an extent (it allows sustainable planning and no concerns about exchanging of ownership) but it does not stop clubs amassing huge debts. According to a Guardian article in early 2010, the combined debt of the “big two” – Barcelona and Real Madrid exceeded 1 billion euros. Since then, Nuri Sahin, Mesut Ozil and others have arrived at the Bernabeu and duo Cesc Fabregas and Alexis Sanchez have signed on at Barcelona.

These statistics are mindboggling if you consider the fact that both (Barca and Real Madrid) consistently dominate the Deloitte money rich list in football, mostly down to their ability to independently negotiate Television rights deals that have seen them increase the gap between the rest of Europe’s Elite having both agreed long term contracts of which total up to around £850 million for Barcelona. €479.5 and €450.7 million were Real Madrid and Barcelona’s total revenues for 2010-2011.

The latter’s income increased massively due to their first paid shirt sponsorship from the “Qatar Foundation” which attracts 30 million euros per year, perhaps a sign that abandoning tradition for monetary returns is a desperate requirement of the money guzzling modern game. What is baffling about these numbers in the intricacy of the outgoings. How can a club with an annual revenue of €450.7 million require a £125 million loan? So many unanswered questions go begging as many turn a blind eye to the finances of football in preference of the glamour the game encompasses. Even the articles consulted to find this data were inconclusive. The ruling in Spain to allow clubs to find their own television deals has both pros and cons:


  • It mainly benefits the bigger clubs, the main reason Barcelona and Real Madrid stand alone at the top of the rich list is because of the TV Rights flexibility offered in Spain and the demand to have their games screened to their wide fan base. Valencia made the top 20 of the Rich List for a rare time in 2010-11 primarily because they agreed a 66 million euro television deals.


  • It causes mass economic inequalities in the league. Unlike England and Germany, the money is not spread equally and fairly (Reportedly English teams receive £30million each per year from BSkyB). This could potentially lead to a decline in the competitiveness in the La Liga as the top teams have more financial muscle to buy players whilst the rest of the Spanish football teams struggle financially. Reports in the last few years suggested a number of mid-table teams are in financial trouble including Athletico Madrid and just around four years ago, Valencia.

Indirect Positive

  • The latter (Valencia CF) found themselves struggling financially with poor results driving fans away, the cost of a new stadium and the effect of reduced gate income on salaries. This forced them, over the subsequent three seasons, to sell their most prised assets, notably Juan Mata, David Villa and David Silva. Despite this, their football improved under coach Unai Emery and as results improved, fans became interested once again. Valencia’s European exploits over the past few seasons has also seen them gain more television money and they are now regarded as the “Best of the Rest” in La Liga. The funding from their own negotiated television deal has been successful in helping resurrect themselves and reaffirm their position in the Top Four.


The Spanish Liga was proposed by Sepp Blatter to be a role model to the English Premier League. This caused understandable outrage when considering the better German model and also the grim financial statistics that accompany the Liga. Blatter was misleading and over-exaggerative in his suggestions for La Liga to be a financial role model for Europe as he claimed “most” clubs were owned by their fans when only 10% of the top two leagues are owned in this way. To say that the club is owned by the fans is also a considerable over inflation of reality. Real Madrid socios pay an extra 130 euros per annum for the right to vote in the club’s presedential elections every four years, apart from that, they have little say in any other aspect of the running of the club and are powerless to prevent a build up of debt.

These grim statistics include:

An estimated 85% of clubs in the top three divisions (51 of 60) were behind with their wage payments in 2010. The poorly paid lower-league players are owed the most.
Overall debt in Spain’s top division (as of 2010) was around €3.5bn (£3.1bn). By adding in the next two divisions financial figures, the total cost reached nearly €5bn – higher than the debt in England.

The Italian (financial clean-up) Job

In the Italian leagues, the financial condition of the league continues to deteriorate. Serie A’s statistics were the most up-to-date and suggested a grim decline in revenue. An article on La Gazetta Dello Sport (29 March 2012) reported that only 19 of Italian football’s 107 professional clubs (18%) ended the financial year in profit.

As the recession hits the traditional football fan in other ways like rising living costs across Europe and rising unemployment along with more cheaper alternatives of watching games (cable tv or at bars/pubs), a consequence of this has been the subsequent fall in the number of fans watching games from the stadium – a 2.4% fall in Serie A attendances over the past year, leading to a decrease in gate receipts whilst an increase in costs, including wages, has created a greater deficit than that of 2010-11.

The basic, fundamental problems that have hit European football hard have also taken their toll on Italian football, the following are figures which reaffirm this:

  • Serie A’s debt has increased to €2.6 billion, up 14% on last year.
  • The net loss for the whole of Italian professional football is €428 million, a deficit which has risen by €80 million (23%).
  • The total value of Italian football last season dropped by 1.2%, to around €2.5 billion, with Serie A generating 82% of that figure – €2.05 billion.


Italian football reflects a general trend in the downfall of European football, the top Serie A teams have had limited notable high profile transfers of late. There are still high earners in Serie A like Zlatan Ibrahimovic and Robinho but, as with all European Leagues, spending during the transfer windows has declined on last year.

Take inspiration from the Germans and their Bundesliga

Germany’s Bundesliga is finally getting deserved recognition from its European counterparts having been shrouded in the mist of the argument over the best league in the world. Personally, I can’t think of another European country where the quality of football is so high, the crowds are so passionate, the stadiums are so full and the clubs are so stable than Germany. FC Bayern Munich’s European exploits in the Champions League combined with Schalke 04’s Quarter Final Europa League appearance and Borussia Dortmund’s inability to show their full potential on the European stage in the CL Group stages have shown the German football is slowly readying itself to make its way back to the forefront of European football.
“In Germany the well known “50+1%” ownership rules which apply to most clubs have given football a highly stable ownership base compared to English football.” Andy Green’s written evidence to Parliamentary Committee Report

The ownership model in Germany is the “50%+1” model as quoted above, this means that the members of the clubs must have a 51% stake preventing any single independent external businessmen or consortiums of control. This is true for all bar two of the Bundesliga’s clubs (Wolfsburg – owned by car manufacturer Volkswagen and Bayer Leverkusen – owned by pharmaceutical company Bayer) because these companies are locally based and also been involved with the football club for more than 20 years they are allowed by the league rules to acquire a majority of the club (both originated as company teams).

The 50+1 means that the other 49% or less left free can be made available either a) for investors looking for a business opportunity or be put b) on the stock market. This does not stop outside influence, but merely limits it. Hannover 96 have aired their frustration as they feel it restricts club from competing at the highest level, however, becoming financially looser is not a dead cert way to success. TSG Hoffenheim have scored the right balance, having secured substansial investment from outside investor and entrepreneur, Dietmar Hopp which catalysed their rise up the divisions in a story that brought the romance back to football.

The Bundesliga as a brand, a competition, is in good shape. We have a very, very interesting competition, a stable and sustainable business model that relies on three revenue sources

– Bundesliga Chief Executive, Christian Seifert

The three revenue sources Seifert refers to are the match-day revenue (€424m), sponsorship receipts (€573m) and broadcast income (€594m) amount to the Bundesliga’s €1.7bn annual turnover – it is the Best league in the top in Europe for % of turnover spent on wages with the average at just below 50%, France has the highest at 71%.

The DFB (German Football’s governing body) and Bundesliga also created a rule a decade ago stating that, in order to gain a license to play in the Bundesliga, each club must run an education academy for youth players. This led to remarkable results. 19 of Germany’s 23-man squad for the 2010 World Cup were the product of Bundesliga academies. It has also meant that only three of the top 36 Clubs in Germany are thought to be in debt, and collectively, German football is in profit.

Some outcomes of the Bundesliga that have made it financially solid thanks to the rulings are:

Last year’s €1.7bn turnover and €30m profit was that Bundesliga clubs paid less than 50% of revenue in players wages.

The Bundesliga is thought to be taking in more sponsorship money — some 610 million euros annually — than any other league. Hamburger SV have announced an extension to their shirt deal with UAE airlines Fly Emirates until 2015. Bayern Munich have a lucrative contract with mobile provider T-Mobile.
The above point is simply because of the great value Bundesliga offers. Borussia Dortmund, reigning Bundesliga champions and one of the most exciting, young, attacking teams in Europe sell tickets for just over £10 for a game for a seat in the world’s biggest football stand, with a £152 season ticket enabling fans to watch 17 home Bundesliga games and one European game. In comparison, the cheapest tickets for English Champions Manchester United is £28 for a poor standard view – season tickets for the Red Devils can hit £950 for just 19 home games. The next bullet point shows the direct outcome of cheap tickets.

Continuing on with the positive outcomes:

  • During the 2008-2009 season, an average of 41,900 spectators watched to every Bundesliga game in the stadium, comfortably beating the English Premier League (35,600), the Spanish La Liga (28,500), Serie A (25,300)
  • Less money required to be spent on players because German clubs have invested so much time and effort into their Academies that it would be pointless to ignore the talent developed there. This leads to more money being saved.
  • The Bundesliga’s 171 million euro profit eclipsed the Premier League’s 85 million euro.


Until the late 1990s, clubs were owned exclusively by their fans, then the laws were relaxed to allow a degree of outside influence.

The DFB (German football’s governing body) really have given valuable lessons to fellow European League. Having ensured clubs can survive financially, the clubs are able to pass on that benefit to the fans by offering low cost tickets. Borussia Dortmund ticket prices come with the luxury of a free rail pass to the game and back along with cheap refreshments at the match. The most expensive pie in Britain can be found at Arsenal where it will set a spectator back £4 according to a BBC Sport survey in 2011.

Here are some crucial disprovements of typical putdowns of the Bundesliga:

“The League isn’t competitive.” – Think again, in the last five years, there have been four different Champions showing that the league is highly competitive, and, as TV money is equally shared out, the teams have no economic advantage over each other unlike Spain.

“Little talent in respect to England and Spain.” – Think again, Germany’s national team excited the Footballing World at the 2010 World Cup and they have been set high expectations going into Euro 2012 with most of their young, attacking players based in Germany, like Muller, Kroos, Gomez, Gotze, Marin, the aptly named Bender brothers, Reus, Schurrle, Draxler, Sam and Holtby in a seemingly never ending list. with the exception of Ozil and Kheidra at Real Madrid.

“They don’t spend money on transfers” – The only two big (in the sense of money) signings of last season coming into this one were Manuel Neuer and Jerome Boateng, who both arrived at Bayern Munchen. There is a reason why this is though, it’s because Germany’s Youth Academy’s are heavily invested in AND reliable. German teams are not afraid to play their young players early, which makes them better at a younger age. With England in particular there is this mentality that a player is too young to be given a game. What young players in in the quality bracket that can be compared with Thomas Muller, Andre Schurrle, Toni Kroos, Mesut Ozil (product of Bremen) and Mario Gotze in England? I can only think of Jack Wilshere.

Conclusion – The VERY Unscientific Buxton Theory

I’m not really as egoistic as this normally, when I think of an idea then put my name on it, but it did need a name!

First of all, I hope it has been as informative to you as it has been for me researching and compiling it. A conclusion that can be reached is here is proved through my diagram that I made up and called The Buxton Theory (just to make me feel as if I had proved something important really). The idea behind it is that, the further along and the lower you are on the graph, the more financially successful and, over time, the more materialistically (winning competitions etc) successful you will be, theoretically. Germany are close to rivalling Spain in the Euros and Bayern Munich pose a serious threat to Real Madrid in the Champions League Semi-Finals, evidence which shows this graph has potential!

The main points to be taken from this piece and the lessons that can be learned for other countries football to ensure financial sustainability and stability are:

Be tough with the rules

The DFB Bundesliga rule book is 200 pages long and has highly specific rulings on finance which ensure anyone not adhering to the rules is sufficiently punished. The 50+1 rule is one that would surely work with many British clubs (Newcastle, Sunderland etc) with massively passionate fans.

Lay trust in youth academies

It may initially hamper the quality of the league but if the trust is gradually introduced then only half the team would need to be from the Youth Academy, following the 6+5 rule which despite being unappealing to watch, would be financially suitable as it would reduce the need for expensive imported players. A reduction in ticket prices would be needed to keep fans interested. The top two Leagues in Germany invested 75 million Euros in these youth Academies in 09/10.

Get a pro-active Football Association

I’m not into Italian or Spanish football well enough to conclude about the effectiveness of their FA’s, but certainly from England’s FA perspective, they have many lessons to learn from the DFB in taking a leading role in ensuring the sustainability of football in their country.

Limit outside influence

The DFB were wise enough to relax the rule making outside investment illegal having seen the desire elsewhere on the continent for investment in football. The fans will always still have a majority in the club whilst welcoming investment but NOT decisions from outside donors.

Ditch the ‘unfashionable’ idea

The Premier League may currently be the place to be regarding money and perhaps playing, but will it be the same case in ten years? All those involved in the game need to realise that it’s not just about the image; the WAG culture that infests the game, the big cars and the mansions, it’s about what league will be the most successful over the length of a players career, and it’s looking like it could be the Bundesliga.

Listen and lay trust in the fans

The fans are those who take the thick and thin of the club’s successes and failures over a prolonged period of time, so why, in Italy, Spain and England are most clubs allowing owners with the only interest at their heart being money, do a dis-service to the loyal supporters of the club by neglecting it if there is no viable business output when they take over? The fans’ will always be with a club, the owners won’t. It is time to follow the German model, which is not faultless, but has put German football in far better stead than the rest of Europe, and provide best value and a transparency and responsibility for those most passionate about the club, the fans’.

Thanks for reading.


All Quotes from the Culture, Media and Sport Committee Report are 100% untampered and exactly representative of the initial manuscripts on the publicly available document and I acknowledge that these are from the website with no intentions as passing them on as my own.

Statistics with thanks to; Goal, Football365, ESPN, La Gazetta Dello Italia, BBC Sport, The Guardian, The Independent, Yahoo! Europort, Financial Fair Play.

Author Details

Kieran Buxton

FC Barcelona & Arsenal fan.

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