Bundesliga topples Premier League in profitability
“The greatest league in the world is a phrase often employed by media partners of the Premier League but on close inspection, it is apparent that the Bundesliga has reasonable claims to challenge this," said Emmanuel Hembert of A.T. Kearney “We believe that the rise of popularity and success of European leagues comes in cycles and we are now on the cusp of change as the English Premier League comes under increasing threat from the economic strengthening of the Bundesliga.” For the last decade the English top flight has been regarded by many as the world’s most exciting league, with its success mainly attributed to its commercialism and stadium upgrades, which has subsequently attracted the best players in the world. However, the Premier League suffered from a decline in profits of 15% from 2005/06 and a further fall of 30% from the following season, coinciding with a record high wages ration in 2006/07 according to the Deloitte Annual Review of Football Finance. Suffering from unsustainable high levels of debt, Premier League teams now find themselves in huge financial difficulty with net debt tripled in 2006/07 from what it was in 2003/04. While other less overt issues such as a perceived lack of competitiveness outside the Big Four, and foreign owners bankrolling loss-making clubs have made the division an uncertain place. In contrast, the Bundesliga is a league reborn, cashing in on the success of the 2006 World Cup in Germany, a growing commercialism, strong economy, increased attendances and a media market that has yet to be fully exploited. The 2006 World Cup meant investment in new state-of-the-art stadia with an infrastructure for a lasting legacy. The country spent 1.4 billion euro on 12 venues, increasing average attendances and corporate hospitality. The Bundesliga’s commercial revenues, such as sponsorship deals and merchandising, are at similar levels to the Premier League at approximately 600m euro and are expected to continue this rate of growth. And although the revenue per supporter is well down on the Premier League, the Bundesliga now holds the highest average attendances in Europe with Borussia Dortmund topping the continent with an average attendance of 74,000. Germany is also reaping the benefits of a stronger economy in turbulent times. Notwithstanding the global credit crunch, the country’s economy still has the highest GDP in Europe, creating a solid platform for clubs to achieve profitable success.