Trends in Cost Management

According to the latest analysis released by UEFA under their Fair Financial Game programme, the average cost split in Europe (734 clubs consulted) is as follows:

• Staff costs:               58%
• Operational Costs:   35%
• Transfer Costs:          4%
• Other Costs:               3% 

Staff costs include in this case salaries, wages, Boni, Social charges, Pension contributions, etc. Under "Operational Costs" we will find a compendium of several cost families of diverse nature, such as stadion costs, materials, depreciations, marketing costs, football schools.... Transfer is here defined as the losses derived from transfer operations. We may believe that inflation is high as far as transfers are concerned, but the truth is that clubs handle that part of the business quite poorly, thus generating losses and not gains. Last season almost one billion € were spent in these operations, a value worth taking into account. Finally, most financial costs and taxes, etc are included in Other costs.

When you have a look at the total picture, UEFA clubs spent in the last season more than 14,4 billion €. Big numbers, particularly when you take into account that they only generated 12,7 billion in revenues, resulting in a total loss of 1,6 billion €.

In light of these catastrophic figures we may think that clubs have been working hard in cutting their losses in recent periods, since you may figure out that these trends do not generate overnight affecting 734 clubs in more than fifty countries at the same time. The answer to that thought is "No, the cost structure of the clubs remains the same at least for the last three seasons, and their expenses grow over after year in a higher amount that their revenues do".

In colloquial terms, we may well speak that the real state bubble we are still suffering from was just a joke.