The Weekly Summary For the Business of Football

SPAIN: Real Reveals Record Financial Results

Real Madrid president Ramon Calderon has hailed the club’s board after the Primera División giant recorded a record set of figures for the 2006-07 financial year. Last season was a landmark campaign for Real as it managed to pip fierce rival FC Barcelona to the league crown and break its trophy drought in the process. The club has now reported on the best financial year in its history after generating €351 million in ordinary revenue, a 20% increase compared to the previous year. Earnings before interest, taxes, depreciation, and amortisation came to €83 million, a 43% increase compared to 2005-06.

“These historic results would not have been possible without the financial rigours of the board and without the professionalism of the top club executives, who have been comparable to those at huge multinational companies,” said Calderon. “Real Madrid has a structure of growth and a team that gives a solid financial base. The team is working towards a solid economic future.”
A profit of €44 million was achieved before taxes, but after deducting total depreciation, the insolvency provision, and the risk contingency provisions. This figure was far in excess of a budget of €3.9 million presented and passed by the club’s members in the Assembly of December 3, 2006.

EUROPE: Top Five Leagues Splash Out On Transfers

While the Barclays (sponsor) Premier League continued to be the dominant force in the transfer market, European clubs have also dipped their hands into their pockets over the summer, particularly in Spain. Real Madrid was Europe’s top spender with around £80 million invested on new players this summer, including the acquisition of Gabriel Heinze and Arjen Robben from Manchester United and Chelsea respectively. Thierry Henry’s transfer from Arsenal helped push FC Barcelona’s transfer spending up towards £50 million, with Atletico Madrid also spending around the same sum.

Outside England, Spain’s Primera División was the next highest spending league in summer 2007, with total transfer spending around half of the amount spent by Premier League clubs. Clubs in the big five European Leagues splashed out around £1 billion on transfers in summer 2007, according to the latest analysis by Deloitte. Alan Switzer, director in the Sports Business Group at Deloitte, said: “Looking further afield, it comes as no surprise to see Real Madrid and Barcelona spending at least as much as their English rivals on transfers, given that they have the highest revenues in world football in 2005-06.” He added: “Broadcast revenues are again the key to explaining the high transfer spending by the two giants of Spanish football, which unlike their Premier League counterparts can sell their own broadcast rights. Both clubs have signed new deals which will generate significant increases in broadcast revenues for each club, to around £100 million per season from 2008-09 - around twice the highest amount that a Premier League club is likely to receive.” Overseas clubs also continue to benefit most from Premier League clubs’ transfer spending, with around half of disclosed transfer spending (£250 million) in 2007 going to clubs outside England.

Leagues To Receive UEFA Cash Bonus

UEFA has announced it will distribute €43.2 million in solidarity payments from the 2006-07 UEFA Champions League to the top leagues of its member associations.

Leagues with participants in last season's Champions League will receive a total of €36 million, while leagues without participants will be paid €7.2 million. England's Barclays (sponsor) Premier League leads the way from those that competed and is set to benefit to the tune of €6.52 million.

Italy's Serie A TIM (sponsor), which produced winner AC Milan, follows close behind with €6.47 million, while at the other end of the scale, Bulgaria's A PFG will receive €455,000 through Levski Sofia's participation. The payments are being made by UEFA as part of the solidarity scheme associated with the Champions League and is aimed at supporting youth development activities in professional football. Of the leagues not represented in last season's Champions League, Norway's Tippeligaen will benefit the most after receiving €351,500, while Wales' Principality Building Society (sponsor) Premier League will take €166,700.

NETHERLAND: Sponsor Comes Out Fighting In Utrecht Dispute

FC Utrecht’s main sponsor Phanos waded into the battle for control of the Eredivisie club this week by staging a press conference to show its support for chairman Jan Willem van Dop. The company demanded that Utrecht’s board should step down, with coach Willem van Hanegem and several players also attending the conference. Phanos insisted that Van Dop was not guilty of financial mismanagement at the club and said it would honour its sponsorship commitments to the club, but not make any extra investment for the time being. On Thursday, Phanos got its wish when a provisional court judge in Utrecht ordered the reinstatement of Van Dop.
“Our commitment is that the club brings to Utrecht the highest level of football, and we want to co-operate only with people who pursue this aim,” said Phanos chairman Geert Ensing earlier in the week. “We are going for a result that is best for the sport, the needs of the supporters, the needs of the coach and the needs of the executive board of FC Utrecht. He who aims to stand in the way must ask himself whether he wants the best for the club.” Van Dop told De Telegraaf that the Board of Supervisory Directors (BoSD) had “made an elephant out of a mosquito”. He added: “If it's up to me, I will work at FC Utrecht for a very long time.” The judge’s decision means the BoSD and interim chairman Broos Schnetz will have to leave the club.

DENMARK: Schmeichel Fails In Brondby Bid

Denmark legend Peter Schmeichel has been rebuffed in his attempts to stage a takeover at leading Danish club Brondby. The former Manchester United goalkeeper, who holds the record for the most appearances for the national team, made an offer for the club as part of a group of investors. That offer was worth €34 million, but has been withdrawn after a lengthy Brondby board meeting on Monday failed to reach an agreement to accept it. Brondby chairman Per Bjerregaard stepped down as CEO of the club on Friday and was named chairman before the offer was made public.

Schmeichel had spent over four years of the formative stages of his career at Brondby between 1987 and 1991, and was set to become sporting director of the club with the group taking three seats on the board. Brondby, located on the outskirts of Copenhagen, is one of the major powerhouses of Danish football along with rival FC Copenhagen. In a separate development, Brondby was recently informed by the club’s main sponsor, Danish insurance company Codan, that it would not be renewing the partnership deal when it expires at the end of the season.

BRAZIL: Corinthians Secures New Samsung Deal

Brazilian club Corinthians has renewed its sponsorship deal with electronics giant Samsung until the end of next year. Samsung will reportedly pay US$9 million to be a main sponsor, marking a big increase on the previous two years of the relationship. Samsung injected $6.1 million and $6.7 million into the club in 2005 and 2006, and the more lucrative deal has been agreed despite the club having struggled for success in recent years.

The deal reportedly hit a snag earlier in the week with the two parties disagreeing over certain clauses, such as the number of tickets granted to the sponsor for matches in the Campeonato Brasileiro. Corinthians interim president Clodomil Orsi said: “This is a demonstration of the importance of our name and the number of benefits an association with us carries.”
Samsung vice-president Jose Roberto Campos added: “The importance that Corinthians has in the world of sport was crucial to keeping this relationship going. We are strengthening our commitment to national sport.” Corinthians this week appointed Ze Augusto as coach on a permanent basis after the team beat Santos 2-0 in the state derby on Sunday.

ARGENTINA: AFA Takes Steps To Tackle Fan Violence

The Argentinian Football Association (AFA) has made a move to combat fan violence in the domestic game by signing an agreement with the National University of Technology to devise a security project that will include personalised tickets for spectators. After an evaluation period of 120 days, the university will take the proposal to the AFA for final approval.

The main objective is to create a system of personalised tickets with a complete register of supporters, to fight the violence that blights Argentinian football. The agreement was signed by the AFA's president Julio Humberto Grondona and the university's dean, architect Luis De Marco. “We have four courses of action,” said De Marco. “We want to create a database so we can carry out analysis and create digitised and personalised tickets. We do not offer a magic solution. We offer seriousness and know-how. We are sure we will provide the tools that the people demand and AFA requires.” Grondona added: “Our intention is simple. We want to ensure that people enjoy the spectacle and see families return to the stadia.”

Source: Soccerex