If someone asked an everyday soccer fan what the second richest league in the world was, how many do you think would offer up the German Bundesliga before La Liga in Spain or Serie A in Italy? Not many would most likely be your answer; however, the Germans seem to have the winning formula figured out, both on the pitch and in the front office, and the world is beginning to witness the results.
What about the Bundesliga has led to its success? According to the Bundesliga Report 2013, the answer to this question goes something like this:
Football is all about enthusiasm, a love for the sport, and taking pleasure in outstanding performances. However, sporting excellence and major success can only be attained in the long term if clubs are in sound financial health, as economic success is an essential requirement for delivering consistently high-quality sport.
It is the juxtaposition of performing on the pitch and a strong focus on financial prudence that has delivered the Bundesliga’s success in recent years. The German top flight broke the €2 billion mark in total revenues (including transfers) for the 2011/2012 campaign for the first time in its history, an increase of approximately €140 million, or about 16.3%, and it marks the eighth consecutive league record for annual revenues. This statistic is even more impressive when you consider that it only broke the €1 billion mark in the 2001/2002 season, which means the Bundesliga has doubled its revenue in just 10 years.
Last season, 14 of the 18 clubs in the Bundesliga (or 78% of the clubs) posted positive financial results, more than ever in the previous four seasons. Though expenditures increased along with revenues, they did so at a similar rate, allowing for a positive financial position for the Bundesliga and its member clubs.
Source of Revenue
The major buckets in which the Bundesliga’s sources of revenue are not dissimilar from the other major leagues around the world. What is different is the evenly spread contribution rates across those buckets when compared to the rest of the world. Below is a break down of the sources of revenue for the Bundesliga from last 4 seasons:
To put it into perspective, other leagues like the Premier League in England and La Liga in Spain rely on broadcasting and media revenues to contribute an estimated 45-60% of the total, whereas in the Bundesliga the same bucket only represents about 26%. However, this figure is expected to increase for the 2013-2014 season to about 30%. Along with the recent success of Borussia Dortmund and Bayern Munich, who played in the first ever all-German UEFA Champions League final last year, has come increased interest from television viewers in watching Bundesliga matches. Hence, a new TV deal was due for the league which will bring a relatively sizeable increase to that particular bucket of revenue.
The holistic nature of the Bundesliga’s source of revenue provides a very stable foundation for future growth because it is not as reliant on one source as other leagues are in the world, as previously mentioned. The Germans have proved that a well-rounded approach can indeed work, and as the league continues to grow that approach will serve them well. One key aspect of the Bundesliga that contributes to the well-rounded revenue source stream is the match day attendance rates. Clubs are averaging 44,293 per game last season, which represents a 5.2% increase versus the prior year. How does that stack up to the rest of the top leagues?
In comparison to the rest of Europe, the Bundesliga continued to extend its lead in terms of spectator numbers ahead of the English Premier League. In Germany, an average of almost 10,000 more spectators flocked to the premiership grounds than in England, where there was an approximate 2 per cent decrease in the number of people attending games in the Premier League in 2011-12 compared to the previous season. While average attendance in the Spanish Primera División levelled off at 28,500 (up 1 per cent), there was a downward trend in Italy (22,493) and France (18,900).
The average ticket price of a match in the Bundesliga is half the cost of the same in the Premier League in England, yet the Bundesliga has managed to increase match day revenues by 21.3% in the last 4 years.
On The Pitch
No one can refute the recent success and and the path to dominance of the Bundesliga in world football. The league has put a club in the final of the UEFA Champions League in 3 of the last 4 years, more than any other league in the world, placing both finalists last season. While the only German victory was in 2013, the consistency shown has been more than impressive, considering the differences in spending habits between the Bundesliga and the rest of the top leagues to acquire the top talent in the world.
Though the merit of the award may be disputed in the footballing community, it does not change the fact that Frank Ribery won the UEFA Player of the Year award last season – a Bundesliga player for Bayern Munich, and not the ballon d’or winner Lionel Messi or Christiano Ronaldo.
The Bundesliga is a league on the rise, and on not to be trifled with or taken lightly, as the world has come to find in recent years. Continued focus on the proper balance between on the pitch success with responsible financial management and risk taking will give rise to future success of the league and will further propel German football to the next level. Given the recent heavy focus on financial responsibility from UEFA, European football’s governing body, German football is very well positioned for continued growth, and could prove to be the model that other leagues adopt and try to emulate in the future.