LaLiga has presented its Financial Report for the 2019-2020 season, in which the total income of the competition achieved a new historical record – despite the negative effects of the COVID-19 pandemic – and where the robustness and economic solvency of the clubs in LaLiga Santander and LaLiga SmartBank as a whole are demonstrated in facing up to the strongest impact that will manifest in 2020/21.
The main conclusion arising from these results is that LaLiga’s Clubs have very good indebtedness and equity ratios, with confidence from investors that allows them to obtain financing under favourable terms and with liquidity buffers thanks to their efforts in containing costs.
Total income was €5,045 million, +3.6% compared to 18/19, although this figure could have been €5,321m (+ 9.3%) without the impact of COVID-19 according to estimates by PwC. Additionally, the average cumulative long-term growth in each of the the last five seasons was +12%, a figure that is worth even more when compared to other sectors and companies: IBEX35 companies, for example, decreased by -1.4% on average in the last five years.
Of note is the greater contribution from LaLiga SmartBank to the whole, at 9.3% of total income, a historical maximum and a sign of an ever more balanced competition; broadcasting rights income stood at 35% of the total.
Compared to the other major European competitions, LaLiga is the only one that made a profit (€77m Net Result) and continues to be the leader in income on a demographic and price level equality comparison basis (€107 per capita).
In terms of total expenses, the cost and amortisation of sports staff continues to be clubs’ largest outlay, having risen to 60% in 19/20, two points more than in the previous season, compared to the cost of non-sports staff, which remained stable at 5%.
Spanish professional football can boast resilient high-level profitability, with a positive operating profitability despite the impact of COVID-19. EBITDA after transfers of players exceeded €1,000 million (€1,196 million without COVID according to PwC), thanks to the significant effort of the clubs in containing costs.
LaLiga maintains a great capacity for investment and a sustainable level of indebtedness (NFD/EBITDA of 1.63x), thanks to strong profitability levels. In this sense, net financial debt increased to €745 million, mainly resulting from net investments of €509 million. Of the total invested, 84% was for players and 16% for infrastructures.
The pandemic broke out when the bulk of the investments had already been made or committed to in the 19/20 season. A drastic reduction in this will be seen in 20/21 as well as a decrease in the capital employed (NPA)/total income ratio – currently at extraordinary levels. The investment data shows that LaLiga generates talent that is sold abroad, affording us the possibility of reinvesting in more talent and infrastructures.
Positive results from professional football have a direct impact on other sectors, sports and competitions. In the 20/21 season, LaLiga will contribute more than €125 million to other entities to develop non-professional football and other sports.
Of this amount, the RFEF will receive 52% (65.6 million euros), the HCS 39.5% (48.8 million euros) and the footballers’ unions8.9% (11.3 million euros). This is a 13% increase compared to the amount contributed in the 19/20 season and 202% compared to the 14/15 season.
This data joins the PwC study on the socio-economic impact of professional football in Spain in 2018, which indicates that it represents 1.37% of Spanish GDP, generates 185,000 jobs and contributes more than 4,100 million euros in taxes.
Outlook for 20/21
The bulk of the impact of the Covid will be seen in the 20-21 season, with stadiums without fans and a transfer market characterised by clubs exercising responsibility to face of the situation generated by Covid.
Thanks to the economic control that LaLiga clubs and SADs self-imposed and their efforts in managing this, the competition is well prepared for the impact of COVID in the 20/21 season, where we can estimate that despite the economic year not yet being closed, results will be lower than expected, but thanks to the economic strength of the clubs they will be able to manage this difficult season.
LaLiga’s Clubs enjoy a good equity position (Equity of €1,767m and an equity ratio of 23.6%) and liquidity buffers at all-time highs (€789m compared to €564m in 18/19), which is adequate to absorb the net impact of 20/21 – estimated at €852m by PwC.
The Spanish clubs were the most responsible in the transfer markets in the 20/21 season despite being the only ones to obtain positive results in the 19/20 season.