| KN92045 |
| KEY NOTE Plus : Football Clubs and Finance : June 2005 |
 |
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| Executive Summary |
| 1. Market Definition |
| Report COVERAGE |
| MARKET SECTORS |
| Match Day |
| Match Receipts |
| Corporate Hospitality |
| Broadcast |
| Commercial Revenue |
| Sponsorship Revenue |
| Merchandising Revenue |
| Catering and Conferencing |
| Internet Revenue |
| Publishing Revenue |
| MARKET TRENDS |
| Middle Income Fans Fill Premiership Stadia |
| Fans Back Football League Revival |
| Table 1: UK Football League Attendances by Number of Spectators (million), 1999/2000-2003/2004 |
| Competitive Imbalance Lowers SPL Interest |
| European Commission Investigation Creates Rights Uncertainty |
| International Club Brands Dominate Sponsorship Market |
| Foreign Investors Boost Club Valuations |
| Debt Levels Correct Player Market |
| ECONOMIC TRENDS |
| Gross Domestic Product |
| Table 2: UK Gross Domestic Product at Current and Annual Prices (£m), 2000-2004 |
| Inflation |
| Table 3: UK Rate of Inflation (%), 2000-2004 |
| Unemployment |
| Table 4: Actual Number of Unemployed Persons (million), 2000-2004 |
| Household Disposable Income |
| Table 5: Household Disposable Income Per Capita (£), 1999-2003 |
| MARKET POSITION |
| The UK |
| Table 6: Top Football Matches by Number of UK Viewers† (million), 2004 |
| Table 7: Top Football Matches by Number of UK Viewers† (million), 2003 |
| Overseas |
| 2. Market Size |
| THE TOTAL MARKET |
| Table 8: UK Football Clubs by Turnover (£000), 1999/2000-2003/2004 |
| BY MARKET SECTOR |
| Match Day |
| Table 9: Match Day Revenue of English Premiership Clubs by Value (£m), 1999/2000-2003/2004 |
| Broadcast |
| Table 10: Broadcast Revenue of English Premiership Clubs by Value (£m), 1999/2000-2003/2004 |
| Commercial Revenue |
| Table 11: Commercial Revenue of English Premiership Clubs by Value (£m), 1999/2000-2003/2004 |
| Table 12: English Premier League Shirt Sponsors by Value (£m) |
| OVERSEAS TRADE |
| 3. Industry Background |
| RECENT HISTORY |
| NUMBER OF COMPANIES |
| New Companies |
| EMPLOYMENT |
| Table 13: Employment at the Top Five Premiership Clubs by Turnover (£000 and number of employees), 2003/2004 |
| REGIONAL VARIATIONS IN THE MARKETPLACE |
| DISTRIBUTION |
| HOW ROBUST IS THE MARKET? |
| LEGISLATION |
| Labour Laws |
| Competition Laws |
| Governing Body Regulations |
| UEFA Club Licensing |
| Disclosure of Agents Fees |
| KEY TRADE ASSOCIATIONS |
| The FA Premier League |
| Federation of International Football Associations |
| The Football Association |
| The Football League |
| The Scottish Football Association |
| The Scottish Premier League |
| Union of European Football Associations |
| Other Trade Organisations |
| 4. Competitor Analysis |
| THE MARKETPLACE |
| Table 14: UK Football Clubs Listed on the Stock Market |
| Table 15: Delisted UK Football Clubs |
| MARKET LEADERS |
| Arsenal Holdings PLC |
| Company Structure |
| Current and Future Developments |
| Financial Results |
| Celtic PLC |
| Company Structure |
| Current and Future Developments |
| Financial Results |
| Chelsea FC PLC |
| Company Structure |
| Current and Future Developments |
| Financial Results |
| Liverpool Football Club and Athletic Grounds PLC |
| Company Structure |
| Current and Future Developments |
| Financial Results |
| Manchester City PLC |
| Company Structure |
| Current and Future Developments |
| Financial Results |
| Manchester United PLC |
| Company Structure |
| Current and Future Developments |
| Financial Results |
| Newcastle United Football Company Ltd |
| Company Structure |
| Current and Future Developments |
| Financial Results |
| The Aston Villa Football Club PLC |
| Company Structure |
| Current and Future Developments |
| Financial Results |
| The Rangers Football Club PLC |
| Company Structure |
| Current and Future Developments |
| Financial Results |
| Tottenham Hotspur PLC |
| Company Structure |
| Current and Future Developments |
| Financial Results |
| OUTSIDE SUPPLIERS |
| Sports Clothing, Footwear and Equipment |
| Table 16: English Premier League Kit Suppliers |
| Construction and Maintenance |
| Big Screens |
| Stadium Advertising |
| Catering |
| Travel Companies/Hotels |
| Printing/Publishing |
| Electronic-Ticketing Companies |
| Artificial Turf |
| Giftware |
| Shop Fitting |
| Stewarding |
| MARKETING ACTIVITY |
| Exhibitions |
| Table 17: Conferences and Exhibitions Attended by UK Football Clubs, 2003-2005 |
| 5. Strengths, Weaknesses, Opportunities and Threats |
| THE totaL MARKET |
| Strength |
| Weakness |
| Opportunity |
| Threat |
| MATCH DAY |
| Strengths |
| Weakness |
| Opportunity |
| Threat |
| BROADCAST |
| Strengths |
| Weaknesses |
| Opportunity |
| Threat |
| COMMERCIAL revenues |
| Strength |
| Weakness |
| Opportunity |
| Threats |
| Opportunity |
| Threat |
| 6. Buying Behaviour |
| INTRODUCTION |
| CONSUMER penetration |
| Table 18: Match Attendance, Media Interest in Football and General Interest in Football by Sex, Age, Social Grade, Region and Annual Income (% of adults), 2004 |
| Support of Football Clubs |
| Table 19: Support for Premier League and Football League Clubs by Sex, Age, Social Grade and Region (% of adults), 2005 |
| Attendance at Football Matches |
| Table 20: Attendance at Four or More Football Matches Per Year by Sex, Age, Social Grade and Region (% of adults), 2005 |
| Variables in Demand for Match Tickets |
| Table 21: Attendance at Football Matches Based on Variables of Ticket Availability, Price and Stadium Quality by Sex, Age, Social Grade and Region (% of adults), 2005 |
| Uptake of Pay-TV and Responsiveness to E-Marketing |
| Table 22: The Uptake of of Pay-TV Subscriptions and Club Products/Tickets Marketed Via E-Mail or Mobile Telephone by Sex, Age, Social Grade and Region (% of adults), 2005 |
| Purchasing Internet and Mobile Telephone Services |
| Table 23: Subscription Purchases of Football Action Delivered by Club Website and Mobile Telephones by Sex, Age, Social Grade and Region (% of adults), 2005 |
| Purchasing of Merchandise |
| Table 24: The Purchase of Football Club Merchandise and its Relation to Price by Sex, Age, Social Grade and Region (% of adults), 2005 |
| 7. Current Issues |
| THE ROLE OF THE INTERNET |
| Subscription Content |
| E-Commerce |
| INTERNATIONAL MARKETS |
| HEALTH |
| THE POLITICAL SCENE |
| Supporters Trusts |
| Table 25: Clubs Owned or Controlled by Supporters Trusts |
| Table 26: Supporters Trusts (Shareholdings Above 15%) |
| The Gambling Bill |
| PRODUCT DEVELOMENT |
| CONSUMER DEMAND |
| CORPORATE ACTIVITY |
| Leeds United |
| Manchester United |
| Wrexham |
| Securitisations |
| REGULATORY CHANGES |
| LEGAL ISSUES |
| 8. The Global Market |
| EUROPE DOMINATES WORLD MARKETS |
| Table 27: Turnover for the Top European Football Leagues, (em), 2002/2003 |
| Asia Competes Against European Club Brands |
| Table 28: Level of Interest in Selected Leagues by League and by Country (%) |
| The US Banks On Major League Soccer Expansion |
| South America Seeks Legal Formula |
| Australia Restructures Domestic League |
| The Future |
| 9. Forecasts |
| INTRODUCTION |
| Gross Domestic Product |
| Table 29: Forecast UK Growth in Gross Domestic Product in Real Terms (%), 2005-2009 |
| Forecasts 2005 to 2009 |
| Table 30: Forecast Total Turnover of UK Football Clubs by Value (£000), 2004/2005-2008/2009 |
| Future Trends |
| Demographics |
| Market Segmentation |
| Technological Change |
| The Labour Market |
| Club Ownership |
| Competitive Structure |
| Competitor Forecasts |
| The Impact of the Euro |
| 10. Company Profiles |
| Chelsea Fc Plc |
| Liverpool Football Club And Athletic Grounds PLC |
| Manchester United Plc |
| Newcastle United Football Company Ltd |
| The Rangers Football Club Plc |
| Tottenham Hotspur PLC |
| Further Sources |
| Associations |
| Publications |
| General Sources |
| Government Publications |
| Other Sources |
| Bonnier Information Sources |
| Revenue from English and Scottish League football clubs amounted to £1.94bn for the 2003/2004 season. This represents a 5.2% rise from the previous year and a 9.3% rise over the year before that. |
| Income for UK football is generated from a number of areas. These include match receipts, corporate hospitality, broadcasting, sponsorship, merchandising, online services and publishing. Of these, the broadcast sector has provided the largest leaps in revenue for England's top clubs. |
| Broadcast earnings for UK clubs from all sources increased by 3,520% between the launch of the Premier League in 1992 and 2003. However, in 2003, the Premier League signed an exclusive 3-year deal with BSkyB, which led to a small decrease in broadcast revenue for live rights. |
| The deal attracted the scrutiny of the European Commission, which suggested that more live matches should be made available to consumers on multiple broadcast platforms. This resulted in a compromise agreement in which BSkyB agreed to sublicense some rights to another broadcaster for the 2005/2006 season. The League also agreed that, in future deals, live rights must be obtained by more than one broadcaster. |
| The erosion of exclusivity arrangements threatens the value of future broadcast deals. However, UK football clubs are not as heavily reliant on broadcast income as some of their continental counterparts. In terms of match attendance, the Premier League operated at close to capacity across the 2003/2004 season, while aggregate attendances in the Football League are at their highest level since the 1963/1964 season. |
| BMRB Access consumer research commissioned for this report also indicates that the profile of fans attending football games may be changing. The upgrading of UK stadia and the glamour of the Premier League seem to be attracting more ticket-holders from the AB social grade. There has also been an increase in the number of corporate hospitality guests. |
| In 2002, Key Note reported that the financial stability of football in England and Scotland was under threat, partly as a result of failures to exert control on player transfers and wages. In 2005, fiscal discipline has become key to the management of UK football clubs. Far fewer clubs entered into administration during the 2003/2004 season than in previous years, and although revenue growth has slowed across the leagues, the UK industry is well placed to maintain its status as the most commercially successful in the world. |
Text © 2005Key Note
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Last updated by Amanda Porteous 2005
