BASIS OF PREPARATION: Club Finance and Operations
The foundation of the Club Finance & Operations section of the footballbenchmark.com portal is an analysis of the publicly available statutory financial statements ("the Financial Statements") of various professional football clubs within the highest division of their respective country.
In respect of each professional football club, all financial figures have been taken from the Financial Statements since the 2011/12 football season. For the English Championship clubs, the 2013/14 and 2014/15 football seasons have been analysed.
The Financial Statements utilised in this portal were acquired either from the relevant public sources in each country (for example Companies House (England); Registro delle Imprese (Italy); Registre du Commerce et des Sociétés (France); Registro Mercantil (Spain); Unternehmens Register (Germany); etc.) , or other public sources (for example a club’s official website).
As far as the team responsible for this portal is aware, the Financial Statements for each professional football club have been prepared on the basis of the accounting regulations and principles in their respective country or in compliance with International Financial Reporting Standards ("IFRS"). In the case of a change in the accounting policies used by a professional football club for the preparation of its Financial Statements, KPMG is under no obligation to reflect any changes subsequently made to financial statements based on which the Data and Analytics section of the footballbenchmark.com portal has been developed.
The team responsible for this portal has relied on information included in the published Financial Statements of each club. In performing our analysis, we also relied upon information of a non-financial nature obtained from authoritative publicly available sources: national governing bodies, trade associations, international federations and social media. KPMG professionals have not performed any verification work or audited any of the financial information or any of the non-financial information obtained from authoritative sources.
The objective of the portal is to illustrate the performance of professional football clubs in key areas and enable comparisons of core business operations on a club-by-club basis. The team responsible for this portal is aware that some professional football clubs have diversified their businesses into other sports and/or into non-sport activities. Where the financial results of this diversification are evident in the Financial Statements, they have been excluded from the analysis.
Whilst every effort has been made by KPMG to make comparison between professional football clubs consistent over time, differences of accounting practice in each respective country, differences in reporting currencies, fluctuation in exchange rates, and differences in year ends may limit to a certain extent the comparability of data reported by this portal.
Financial year ends
In general, the financial year end of professional football clubs tend to be broadly aligned with the football season. However, professional football clubs do not have homogenous year ends. No adjustments have been made to reflect differences as a result of differing year ends in order to simplify the comparison between professional football clubs in the same league, as well as professional football clubs across different leagues.
In order to conduct cross-league analysis and comparison, where the local currency is not the euro, the team responsible for this portal has converted all local currency figures into euros using:
- the average exchange rate for the twelve months prior to 30 June of each year for profit and loss items; and
- the exchange rate on 30 June each year for balance sheet items.
The rounding of figures into thousands may lead to some discrepancies when computing input data.
KPMG is aware that some professional football clubs record player trading activities within their revenue figures. Where evident in the Financial Statements, the analysis of total revenue within this portal excludes all player trading activity.
To better illustrate the performance of professional football clubs across their core operations KPMG have attempted to categorise revenue into three areas - matchday, broadcasting, and commercial with the following definitions:
• Matchday revenue – the revenue generated by clubs as a result of staging matches at their home stadium and largely derived from ticket sales;
• Broadcasting revenue – the media broadcasting revenue received by clubs due to their participation in domestic leagues, domestic cups and, where relevant for some clubs, international competitions.
• Commercial revenue – the revenue generated by clubs from sponsorship, merchandising and other commercial operations.
Where revenues are not categorised within the Financial Statements, the team responsible for this portal have consulted the Notes to the financial statements. Where this exercise has not produced a satisfactory answer, a breakdown of revenue has not been published.
Where KPMG considered it appropriate, adjustments have been made to revenue figures to, as far as possible, allow consistent comparison across clubs.
The staff costs figures and notes disclosed within the Financial Statements of professional football clubs generally do not allow any further breakdown into further categories, such as football players, technical staff, medical staff, management and administrative staff.
Staff costs makes reference to total employment costs.
It is the difference between total operating revenue and total operating expenses. It excludes amortisation of players’ registrations, profit/loss on players’ disposal, capital gains/losses from the disposal of financial or other assets as well as items related to the extraordinary activities of a professional football club.
Player trading balance
The sum of the result of the activity of acquisition and disposition of players’ registrations, consisting of:
- (+/-) Player trading
- (+/-) Profit/loss on disposal of players’ registrations
- (-) Amortisation of players' registrations
- (-) Impairment of players' registrations
It includes revenue and costs associated to players temporarily on loan.
Profit/loss on disposal of players’ registrations
It represents the difference (+/-) between the income associated to the sale of players’ registrations, and the net book value of the player registration recorded as an intangible asset.
Amortisation of players’ registrations
The capitalised costs associated with the acquisition of players’ registrations are amortised over the period of the contract agreed with a player.
Impairment of players’ registrations
The loss of value of the players’ registrations, e.g. due to long-lasting injuries or permanent exclusion from the first team squad. Any impairment is recognised as an expense.
The costs associated with the acquisition of players’ registrations are capitalised as an Intangible Fixed Asset at the date of acquisition, and are amortised over the period of the respective player’s contract, including extensions thereto.
The Enterprise Value of a club is calculated as the sum of the market value of the owners’ equity, plus total debt, less cash and cash equivalents. It indicates what the business is worth regardless of the capital structure used to finance its operations.
The Revenue Per Event Per Available Seat is a ratio that measures one aspect of the financial performance of a stadium. It is calculated by dividing total matchday revenue with the combined capacity (number of seats) from domestic league, domestic cup and international competition matches played at the stadium during the season.
KPMG makes no representations nor provides any warranties regarding the accuracy or completeness of the information contained in this portal. KPMG, its managers, directors, partners and employees expressly disclaim any and all liability for errors in omissions from the portal.
The information contained in this portal is selective and does not purport to contain all the information that any reader, including potential investors, may require. Potential investors should conduct their own investigation and analysis, and are advised to seek their own professional legal, financial and taxation advice.
Nothing in this portal is, or should be interpreted or relied upon as a warranty or representation as to the future, nor should it replace the due diligence investigations which a prudent investor would be expected to make prior to investing.
Prospective investors are not to construe the content of this portal as investment, legal or tax advice. In making an investment decision, investors must rely on their own examination of the investment and the terms of the investment, including the merits and risks involved.