Monaco Slated for +€50M in Champions League Earnings

Last Tuesday at the Stade Louis II, Monaco advanced to the quarterfinals of the Champions League,  sending previously favored Arsenal out of the competition on away goals.  The qualification is the club’s biggest achievement since billionaire owner Dmitry Rybolovlev’s 2011 takeover, and a significant step in the club becoming a premier sporting institution from an earnings perspective.

Forecasted Champions League Earnings:

By using the prior year’s Champions League Revenue Distribution as a benchmark, Business of Soccer has forecasted the 2015 Monaco Champions League payout at approximately €53.7M, as demonstrated below:

Analysis by Business of Soccer

Analysis by Business of Soccer

Given odds makers predictions, the forecast above assumes Monaco bows out to Juventus in the quarterfinals in April.  Qualification to the semis, which is really not all that far-fetched, would earn an additional estimated €4.9M, bringing their total Champions League Revenue Distribution closer to €60M.

Additionally, an annual growth rate of 10% is assumed to reflect the overall upward trending conditions of soccer finance today.  The growth rate is the major variable, as total year-over-year payouts actually showed no growth.  Nevertheless, discounting the growth rate would still bring the total to the €50M range.

Monaco’s distribution will contribute to the growing trend of French clubs taking some of the biggest Champions League payouts, primarily attributable to the generous domestic TV market pool cash in France.

Benchmarking:

Deloitte reports in the 2015 Money League analysis that during the 2013/2014 campaign, the top 20 richest clubs in the world, of which Monaco was not a part, earned a minimum of €144M in revenue (turnover).  The latest publicly available financial information for Monaco relates to the 2012/2013 campaign, played in France’s second division, one in which they brought in €21M.  Is Monaco likely to enter the top 20 next year? They will make remarkable strides, but it’s highly unlikely – here’s why:

Matchday Revenue & Attendance

Revenue in the financial world of soccer is mainly divided in three streams – matchday, broadcast, and commercial / other. The Monegasque side, currently 4th in Ligue 1 with a game in hand, draw a league worst eight-thousand supporters per match.  Considering the top forty clubs in Europe all have average attendances greater than Monaco’s total population of thirty six thousand, this is a stat that may persist for the foreseeable future.

Comparatively, in the 2012/2013 campaign, Monaco earned €650K in matchday revenue – in the same season, industry leaders Manchester United earned  €127M.  Even if the club maximized attendance at every match, the Stade Louis II holds eighteen thousand supporters, a smaller capacity compared to that of European giants, and a limiting attribute that will keep ticket revenue down.

While there’s a real possibility for luxury suite and VIP package revenue at the stadium given the exorbitant amount of wealth in the principality, this depends greatly on the club’s ability to transform the matchday experience into a spectacle that draws the masses.  Matchday revenue is and will continue to be a major hurdle for Monaco as the club progresses.

Deloitte's 2015 "Top 20" - Courtesy the Deloitte Money League

The Deloitte Money League’s “Top 20″ (2015) – Courtesy the Deloitte Money League

Branding and Global Positioning

Credit to Monaco for their growth and turnaround after Rybolovlev’s takeover. Going from Ligue 2 to the quarterfinals of the Champions League in three seasons is a remarkable feat that speaks volumes to the club’s players and front office.  Despite these strides, Monaco still has significant ground to make up in becoming a globally recognized sporting organization, and bringing in the revenue that comes with the territory.

These efforts will be significantly boosted by their Champions League run, but stunted by several other factors. Primarily, Ligue 1’s global popularity and TV airtime is dwarfed by the likes of the English Premier League and Spain’s La Liga.  One can attribute this to the lack of star power, competition, and style of play.  While PSG can produce a moment of brilliance from Zlatan Ibrahimovic, Ligue 1 as a whole cannot compete with the fast-paced quality of the English Premier League, or the regular dominance of La Liga’s Cristiano Ronaldo and Lionel Messi.

Regular Champions League participation, especially past the group stages, will further build Monaco’s brand and global presence, while having a “rising tides” effect on the rest of their operations, like merchandise sales, social media presence, and commercial opportunities.  Quite simply, the more the world sees of Monaco in primetime situations, which due to the weakness of Ligue 1 will have to come from the Champions League, the more attractive Monaco will become to the public and sponsors.

Final Product

Obviously, if Monaco cannot deliver results on the field, they will not succeed financially. Levels of investment, commercial agreements, and broadcasting distributions mean very little if the masses are not interested.  Overall, the product, being the team’s performance, has to speak for itself.  This is currently an “if” for the club.

Manager Leonardo Jardim employs a counterattacking style of play, bolstered by a strong defensive unit that has recently had a knack for finding the back of the net.  This isn’t always the most successful and entertaining over the course of an entire Ligue 1 campaign, but has worked thus far in the Champions League for a squad devoid of premium talent.  Domestically, Monaco are in the mix for a Champions League spot – not qualifying for next year’s competition would come as a major blow for the club looking to capitalize off their momentum and progression.

The +€50M headed Monaco’s way should bring in a star player or two, building profile and helping the club improve on the pitch.  Despite the unparalleled tax benefits available in Monaco, luring a superstar to the club may prove to be a task within itself, as it’s reported that within the past year, efforts to purchase Angel Di Maria, Sami Khedira, and Isco from Real Madrid all fell through after the players refused to transfer to the club.

An item of note revolves around Rybolovev, whose financial input for the club has brought the side back to prominence.  Last year, the billionaire’s record breaking divorce (subject to appeal) was reported to split his USD$9B fortune in half.  How that will affect Monaco’s spending, time will only tell, but it’s reasonable to assume that it cannot be good.

Significant challenges lay ahead for Monaco’s quest to be among the world’s elite despite the impressive growth the club has demonstrated in the past few years.  Nevertheless, their Champions League earnings from this season will prove to be essential in achieving their goals – both on the pitch and financially.

What do you think about the rise of AS Monaco financially and on the pitch? Let us know in the comments section below, or via Facebook or Twitter.

Reporting on the business side of the world's game.