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LaLiga has presented the annual Economic Report for the 2021-22 season, in which Spanish professional football practically recovered to pre-pandemic figures in terms of revenue, with Spanish clubs recording the lowest aggregate losses among 5 major leagues, showing the success and robustness of a model based on financial sustainability.
Total Income stood at €4,838.1M, again reaching the all-time record of the 2019/20 season, after the severe contraction of the previous 2020/21 season, which reduced this figure to below €4,000M and has now recorded considerable year-on-year growth of +22.6%.
Of this total income, the item that experienced the greatest growth was matchday revenue (+123%), as a result of the widespread return of the public to the stadiums and the lifting of the capacity restrictions over the first part of the season. There was also a remarkable increase in commercial revenues (+2.9%) against a difficult economic backdrop, recovering part of the previous year’s loss of revenues as a result of the pandemic.
With these total income figures, LaLiga has once again regained second place among the major leagues, both in absolute and relative terms (measuring per capita income and at equal price levels). Regarding that, the recovery of the top position in relative terms will occur naturally over the next few seasons, when pre-COVID activity in the player transfer market, which has been slightly more subdued in Spain, returns.
In terms of Total Expenses, the cost of sports staff continues to be the largest expense at 47%, although the weight of salary costs in relation to Net Turnover (NT) has fallen from 81.2% to 75.1%, and in relation to Total Income from 61.4% to 54.5%, which demonstrates the effort that the Clubs are making to contain costs in order to optimise their operational efficiency and improve their financial situation.
This determination to contain expenses carried out by the Clubs as a whole, as well as LaLiga’s rigorous economic controls, have made a decisive contribution to offset the immediate COVID effects and creating the conditions for a gradual, durable and self-sustaining recovery.
The aggregate Net Result of the Spanish competition was still a loss (€-140.1M) in 2021/22, but with an seemingly lower level of deficit than in the previous year and also compared to the other major leagues. The Bundesliga in Germany suffered a €205M loss, the LFP in France a €601M loss, the Premier League + Championship around a €1,005M loss, and for Serie A + B approximately a €1,150M loss.
This data confirms the sustainable model of LaLiga and the Bundesliga, in contrast to other models based on the absence of adequate economic controls and on constant losses of their clubs, funded with systematic and huge contributions from their shareholders, which means undeniable financial doping that negatively impacts the rules of fair play and distorts the competition.
The aggregate EBITDA (earnings before interest, taxes, depreciation, and amortization) of the Spanish competition, both before and after the results of player transfers, was again positive (€23.9M and €280.8M respectively). This is a significant improvement, but still far from the annual records achieved before the pandemic.
In this regard, it is important to highlight that the long-term negative effects derived from the health crisis will take a few years to be completely overcome, a situation shared by the main European competitions as a whole, although LaLiga’s overall situation is particularly favourable in comparative terms.
The evolution of transfer market activity is probably the clearest indicator of this situation in professional football. The lower activity in the player market is having a strong impact on the sale price of transfers (player exits), but the “automatic stabilisers” activated by LaLiga are enabling the adjustment to be made to a large extent through the matching of purchase prices for transfers (player acquisitions), effectively protecting the balance sheet and the financial situation of the Clubs.
This favourable performance has also allowed the competition’s aggregate organic operating cash flow (before net infrastructure investment) to turn positive again, at €104.3M, and for the first time since the 2018/19 season. As a result, net borrowing has barely grown since the previous year, only +0.8%, standing at €2,102.4M (this balance includes the resources associated with the LaLiga’s ‘Plan Impulso’, which are in fact 50-year subordinated debt of the Clubs, i.e. basically their own funds).
It should be highlighted that the aggregate positive EBITDA and organic operating cash flow records are also very solid, and do not take into account the hundreds of millions in profits and extraordinary financial resources obtained by Real Madrid CF and FC Barcelona as a consequence of their corporate asset monetisation operations (i.e. sale of future rights).
Total Net Investment increased again thanks to higher investments in infrastructure, with major developments in stadiums and training facilities. Further growth is expected as investments from the LaLiga’s ‘Plan Impulso’ and other significant renovations such as the Spotify Camp Nou and Estadio Santiago Bernabeu take place.
LaLiga’s ‘Plan Impulso’is a strategic project with great transformational power, providing very long-term funding to clubs and aimed at making targeted investments. It is very important to underline that, contrary to what has often been claimed, the main objective of this operation is not to offset the immediate effects of the pandemic, but mainly to create the conditions for further growth, both structural and economic, of the Spanish competition in the long term.
In terms of forecasts for the current 2022-23 season, revenue is estimated to gradually continue growing and, most importantly, that aggregate positive net results will once again be reached in Spanish professional competition.
