Economics professor Ekkehard Wenger once noted that investment banks were a lot like German soccer clubs: A great deal of money is taken in, but in the end it all goes to the players.
That's no longer the case for the Bundesliga, Germany's soccer league. For the last season, the quota for personnel costs at the 36 clubs in the first and second divisions was 36.8 percent – lower than ever before in this millennium. That compares to 65 percent for European leagues overall, according to the Union of European Football Associations.
Professional soccer players still belong to a privileged class in Germany. In the past season, a hefty €900 million was paid to players’ bank accounts – €53 million more than in the previous season.
And the clubs are doing even better.
“In the last 10 years, the German soccer league more than doubled its revenues,” said the Bundesliga chairman, Christian Seifert. “It is the second-largest league in Europe and will continue to grow vigorously in coming years.”
Overall club earnings were €390.7 million for the 2013-14 season, a margin of almost 16 percent.
During the 2013-14 season, the 36 clubs took in €2.45 billion, almost 13 percent more than a year earlier. Thirteen of 18 first-division clubs were in the black after taxes.
Mr. Seifert would not name the clubs that lost money, but clearly they are among the least competitive teams. Overall club earnings – before interest, taxes, depreciation and amortization – were €390.7 million, a margin of almost 16 percent. Even companies on Germany’s DAX index can only dream of such results.
Net profits, however, declined from €62.6 to €38.8 million. According to Mr. Seifert, that was down to the fact that there were no big transfers last season, and Borussia Dortmund fell from the previous season’s results.
The Bundesliga is also booming internationally, due in part to the success of German clubs in European competitions recently. The German national team’s World Cup championship last summer in Brazil also boosted international interest – 15 of the 23 national team members play in Germany.
In contrast, when France was champion in 1998, its national league scarcely profited from the World Cup victory, because most of the kickers played abroad.
The British Premier League continues to be most popular in the up-and-coming footballing countries of Asia. But the Bundesliga is snapping at its heels. In the coming season, its international media revenues are expected to rise to €154 million, more than twice the total for the current season.
The media rights to German league games will be auctioned off again next year. It is no secret that they will bring in more than the current €486 million per season.
Christian Schnell covers markets and the auto industry for Handelsblatt. To contact him: [email protected].