>>Toby Thompson: Hello, my name is Toby Thompson. I am here today with John Glen, Senior Lecturer
in Economics here at Cranfield. John, you and I were in the studio talking about The
Ashes win.
>>John Glen: That’s true.
>>Toby Thompson: Good to hear; we are looking at the Deloitte Report on the [financial]
performance of football teams which came out early this year and you have had a chance
to read that. Say some more about your findings from that Report.
>>John Glen: Well, essentially this is a Report that Deloittes produce on an annual basis
and have done so now for quite a large number of years and it allows us to assess the performance
of the twenty largest teams in the world by revenue. Not unsurprisingly the top three
teams this year – as they have tended to be for the last number of years – are Real
Madrid, Barcelona and Manchester United.
Perhaps more interestingly what Deloittes do, is they split the revenues of the clubs
and they look at their commercial activities, their match day activities – how many people
they attract to the ground – and also the impact of the television deals that they have
been able to negotiate.
>>Toby Thompson: So what is the break out of that revenue stream for each of those?
Is it the same for each club?
>>John Glen: No it is not the same for each club; so for example, if you look at the two
big Spanish teams at the top of that league, Real Madrid and Barcelona are able to negotiate
their own television deal independent of all of the other teams in La Liga and therefore
their revenues are disproportionately associated with TV income.
>>Toby Thompson: So you are looking at TV, you are looking at shirts, you are looking
at match tickets. Is there some prescription that you can read into the Deloitte Report
saying that it should be equal for each?
>>John Glen: No; you can’t really say that it should be equal, but what you would worry
about is if there is an imbalance in those revenues. So for example, if you look at the
four big Italian clubs – Inter and AC Milan, Juventus and Roma – historically, up until
this year, they have been able to negotiate their own television deal and therefore their
revenues have been supported by that. But as of this year, they have to share television
revenues with the rest of the teams in Serie A and what this reveals is an underlying weakness
in their match day revenues which have been a very, very small proportion of their total
revenues compared to the other teams that are represented in the top twenty revenue
earners.
>>Toby Thompson: So quite a change they have got to make in terms of building that match
day revenue up?
>>John Glen: Yes, they have now got to look at putting a much greater effort into attracting
people to the ground and then once people have been attracted to the ground, looking
to get as much revenue from each individual visitor as they possibly can.
>>Toby Thompson: So can we assume from the Report then that the revenues match the brand
of these top teams?
>>John Glen: Yes, there are some interesting data; if you look, for example, at commercial
revenues, you might expect that those teams with the biggest brands – for example, Manchester
United, Barcelona and Real Madrid – would be the most successful in terms of their commercial
revenues, but it is actually Bayern Munich who have managed to get the most in terms
of absolute revenue as far as commercial activities would be concerned. And therefore, you would
need to look at the extent to which supposed global brands are being monetised in terms
of the club’s ability to attract commercial revenue.
>>Toby Thompson: So do we know how Bayern Munich are doing that? Does the Report give
some indication?
>>John Glen: The Report generally speaks on the trend and the relative performance; in
terms of looking at the underlying strategies that Bayern Munich are looking at to secure
those commercial revenues, or have engaged in to secure those commercial revenues there
isn’t that much detail. But frankly, if I were looking at the performance of commercial
directors at Real Madrid, at Barcelona and indeed, at Manchester United, then I would
want to question the extent to which they were fully exploiting these so called global
brands.
>>Toby Thompson: John Glen, thank you very much indeed for your time today.
>>John Glen: Thank you.