By Courtney Trenwith
New report shows investment has surpassed $1.5bn; key to driving growth of Euro football clubs
Middle East investment in European football clubs has surpassed $1.5bn and has been the key driving force behind the sport’s significant revenue growth during the continent’s economic downturn, according to a report by Deloitte.
Revenue among European football teams grew 11 percent to $24.6bn in 2011-12, with most of the growth from the “big five” leagues - Bundesliga, La Liga, Ligue 1, Premier League and Serie A.
The “big five” leagues account for $11.8bn - nearly half of total revenues, which Deloitte said demonstrated their commercial attractiveness.
Commercial revenue accounted for more than half (58 percent) of all revenue growth among the “big five” leagues during 2011-12, with much of the new and increased investment coming from sponsors and buyers in the Middle East.
“The continuing tough economic climate in Europe has meant clubs’ ability to achieve uplifts in commercial revenue is increasingly dependent on them attracting sponsors from across the globe. Some of the most notable examples of this being with Middle East based organisations,” Deloitte Sports Business Group consultant Alexander Thorpe said.
“The recent announcement of Emirates’ agreement with Real Madrid means that the 2013/14 season will see both of the world’s top revenue generating clubs, Barcelona and Real Madrid, carrying Middle Eastern airline sponsors.
“There are further high profile examples of similar sponsorships across all of the ‘big five’ leagues.”
Qatar Sports Investment, a subsidiary of the sovereign wealth fund Qatar Investment Authority, made a particular impact with its club Paris Saint-Germain. It has spent millions increasing players’ salaries in a bid to lure the best in the Ligue 1 competition.
UAE national carrier Etihad also announced during 2011-12 that it would spend more than $482m over 10 years on projects surrounding Etihad Stadium in Manchester City, such as a new training ground, youth development center, sports science facility and a bridge.
The airline is the shirt and stadium sponsor of Manchester City, a Premier League team owned by a billionaire member of the Abu Dhabi royal family.
“We continue to see owners from the region investing significantly in both the playing staff as well as the longer term infrastructure of their clubs,” the Deloitte report says.
“For example, in recent years Paris Saint-Germain and Manchester City have coupled their investment in title-winning playing squads, with a commitment to develop world class stadia and training facilities.”
Four of the 10 richest football teams in the world are owned or sponsored by Middle East investors, according to the Deloitte Football Money League ladder.
Real Madrid, sponsored by Emirates, topped the list for the eighth consecutive year in 2011-12 after taking in $650.5m.
Its Spanish rival, Barcelona, which is backed by Qatar Foundation, is second with $613m.
Arsenal jumped to sixth place following an extension of its sponsorship deal with Emirates during that year, while Manchester City made $362m, rising from 12th to seventh on the rich list.For all the latest sports news from the UAE and Gulf countries, follow us on Twitter and Linkedin, like us on Facebook and subscribe to our YouTube page, which is updated daily.