Polish Soccer Clubs Ranked by Business Results
October 26, 2012
Legia Warsaw has topped a league table of the best-earning Polish soccer clubs, ending a three-year spell of domination by Lech Poznań. The Polish champions, ¦l±sk Wrocław, did not make the podium this year.
According to the Ekstraklasa piłkarskiego biznesu (Ekstraklasa of the soccer business) report compiled by consulting firm Ernst & Young, in association with the Ekstraklasa SA company, which runs Poland’s Ekstraklasa premier soccer league, the total revenue of Ekstraklasa soccer clubs last season was almost 20 percent higher than a year earlier. This is mostly due to two Polish soccer clubs taking part in European-level games and restructuring efforts undertaken by a number of clubs, rather than higher fan attendance at stadiums and better management, the report says. Only four of the 16 premier-league clubs posted a profit.
“The revenues of Legia Warsaw and Wisła Cracow, which took part in the European competitions until the spring, had the biggest impact on the improved financial results of the whole league,” said Krzysztof Sachs, partner at Ernst & Young and one of the authors of the study, commenting on the report findings. “This year, however, we do not have an Ekstraklasa club in the group stage of the Europa League, so in the next edition of the report the revenues of the [Polish] clubs may be less impressive.”
In recent years, Polish soccer has undergone an infrastructure revolution. This revolution is almost over, but fans and club heads have to wait before it produces results. Turnout at Ekstraklasa matches last season increased by only 6 percent—to 8,800 spectators per game—compared with the average in the previous season. The growing number of fans at matches has only slightly contributed to the increase in club revenues. Proceeds from ticket sales increased from zl.55 million in 2010 to zl.67.5 million in 2011. Legia, Lech, Wisła, Lechia Gdańsk and ¦l±sk account for a combined 77 percent of the proceeds from tickets. “This shows the potential of the modern stadiums built in large urban centers, which have a powerful fan base and soccer traditions,” says Sachs.
The report points to challenges faced by Polish soccer clubs, but it also highlights the fact that since the publication of the first Ekstraklasa piłkarskiego biznesu report in 2009, there has been a revolution in the club budgets.
The combined revenue of all the clubs has risen by 40 percent over the last four years, slowly approaching the zl.500 million mark. In 2011, the figure was zl.441.6 million, up from zl.371.1 million a year earlier. Revenue from sponsorship and advertising is still the key revenue item; in 2011 it amounted to zl.156.3 million, accounting for 36 percent of the total. A year earlier, the figure was zl.130.8 million. Revenue from the sale of TV broadcast rights is another important item.
Bogusław Biszof, chairman of the board at Ekstraklasa SA, said, “Just a year or so ago Ekstraklasa matches, when broadcast on television, had a chance of reaching just over a million households in Poland. Now, our coverage is up to 8 million households. We have also seen changes in the habits and lifestyle of Polish people. More and more fans expect convenient and flexible access to matches via a smartphone, tablet or computer.”
However, the growth in club revenues has been accompanied by growing costs and debt. Operating costs (not including expenditure on transfers) amounted to zl.533.7 million. A year earlier, they were 15.5 percent lower. Ekstraklasa clubs closed last year with a total loss of zl.119 million, zl.6 million more than a year earlier. The consequence of these losses are increasing liabilities. The total debt of Polish clubs in 2011 stood at about zl.645 million, over zl.110 million more than in 2010. At the same time, club assets increased by zl.27 million and reached nearly zl.336 million. This means that the average Ekstraklasa club has assets that allow it to cover only half of its liabilities.
Although Legia Warsaw doubled their revenues over the last two seasons and recorded their highest revenue during the last season, it did not top the list among the clubs in terms of the best financial situation. Chiefly due to its relatively high debt, Legia Warsaw took third place in the Ernst & Young financial ranking, which was compiled on the basis of 10 indicators. The winner of the financial part of the league table was KGHM Zagłębie Lubin, although the club was only fourth in the revenue subcategory. KGHM Zagłębie Lubin owe their top position in financial terms to the fact that they reported a profit, had the lowest debt and excellent financial liquidity ratios.
Legia Warsaw have the most media exposure among the Polish clubs, ahead of Lech Poznań, Wisła Cracow, Lechia Gdańsk and ¦l±sk Wrocław. The winner of this year’s ranking list in terms of sports-and-business performance was ¦l±sk Wrocław, who were ranked fourth overall in the Ernst & Young league table. The Polish champions owe that chiefly to their good sports results during the last season by Polish standards, a relatively large number of junior team players and relatively low cost per point scored.