Deloitte’ annual report on European football revenues, released only recently, shows that once again Spanish giants Real Madrid and Barcelona top the game’s Money League.

Real generated €438.6 million despite a relatively disappointing season domestically and in Europe, while Barcelona had an income of €392 million.

The top six places, based on season 2009/2010, remain unchanged from last year, with Manchester United, Bayern Munich, Arsenal and Chelsea maintaining the same placings.

Six of the world’s 12 highest earning clubs are based in England and the rise of Manchester City and Tottenham Hotspur has helped to cement the world wide dominance of the Premier League. City produced the biggest increase in revenue of any European club, up to €50 million on the previous season.

Despite the economic downturn, England has the largest representation of any country in the top 20, with seven clubs. Italy and Germany have four clubs each, Spain three clubs and France two clubs. The combined income generated by the top 20 clubs rose to €4.3 billion, up to eight per cent on the 2008/2009 season. Forty four per cent of that total - €1.9 billion – comes from the sale of broadcasting rights.

The Deloitte analysis emphasized the importance of Champions League football to the elite clubs. Fourteen of the top 20 clubs participated in the Champions League and the remainder competed in the Europa League.

The 44-page report focuses on the revenue generated by each club, not expenditure such as wages and debt management.

England

The composition of what was known as the ‘big four’ in England has been changed by Liverpool’s struggles over the last two seasons but off the pitch they have maintained their hegemony.

Manchester United continue to lead the way for Premier League clubs in third position with a record revenue of almost €350 million, followed by Arsenal (€274 million), Chelsea (€256 million), Liverpool (€225 million), Manchester City (€153 million), Tottenham (€146 million) and Aston Villa (€109 million).

Manchester City’s earnings increased by 45 per cent, largely as a result of improved shirt sponsorship and kit supply deals following the huge investment in the playing squad. Commercial revenue more than doubled to €57 million and was the principal driver of the club’s overall revenue growth.

Tottenham, who climb three places to 12th in the list, are regarded as more immediate challengers to the established elite than City after qualifying for this season’s Champions League. But until Spurs match top level football with a stadium that allows it secure increased matchday revenues, then they will always have their nose pressed up against the glass while gazing at the cosy elite.

The Premier League generates €1 billion a year more than the next highest leagues and new, bigger central overseas broadcast deals from this season should allow English clubs to retain the highest representation in the Money League. The domestic market contract has increased by a relatively small amount but the overseas deal has a substantial increase of €235 million per season, which is worth around €35 million per club over three years.

Cost controls, specifically player wages, were shown to be still a major challenge across the game, and all of the English clubs in the table, with the exception of Arsenal, recorded losses last season.

Spain

Real Madrid have consolidated their position at the summit, claiming first place on the 20-team list for the sixth year in succession while Barcelona have surpassed established names by a considerable margin to move some €50 million clear of third place Manchester United. The combined earnings of the big two are €836.7 million, almost seven times that of Atletico Madrid, the only other Spanish club in the list, ranked in 17th place.

Real Madrid utilize an aspiring business structure that has consistently thrived in recent years, but it is not wholly correlated to success on the playing field. Despite operating in the shadow of a Barca team being considered among the greatest sides in history, their corporate shrewdness has ensured they remain at the forefront in terms of total revenue accumulated.

Real Madrid have not lifted a trophy in almost three seasons and yet ticket revenues, though helped by hosting last season’s Champions League final, rose by 27 per cent over the previous season, while an overall eight per cent rise in commercial endorsements was reported.

Barcelona too reported across the board increases, with a two per cent rise in gate receipts (despite hosting three less fixtures than in the previous year) and a nine per cent growth in respect of commercial revenue.

Madrid might have the edge on their rivals but when considered together both sides have stretched clear of their adversaries, and worryingly for those attempting to bridge the gap, both have maximized income while slowly developing their business to counter weaknesses in other areas. Real, for example, remained competitive by increasing ticket prices and promoting their global brand, in order to have the sufficient capital to purchase players of the talent of Cristiano Ronaldo, Kaka or Ozil.

Barcelona’s trophy collection has opened the route to numerous opportunities, but their previous philosophy of refusing to sell advertising space on club jerseys capped their capacity for commercial growth. However their recent agreement with Qatar Sports Investment has given birth to the largest shirt sponsorship deal in history at €135 million, catapulting Barca into Real’s earnings territory in that particular aspect of commercial revenue.

Under current Spanish regulations, where clubs sell their TV rights individually, Barcelona and Real Madrid can collect up to 50 per cent of La Liga’s annual broadcasting revenue, which not only marginalizes the remaining 18 top-flight teams in Spain, but is also vastly superior to deals struck in England, Germany and Italy. The situation has led to many analysts predicting a permanent duopoly of national honours, and a devalued, uncompetitive product.

With broadcasting rights providing such a strong base to allow for expansion and differentiation, it is little wonder that Spain’s big two rule the Money League, and are predicted to for years to come.

Germany

With the success of the German national team, interest has increased in the domestic league. The Bundesliga is a competition seen as being more balanced and competitive than some others. The Deloitte Money League is a reflection of the league’s characteristics. Hamburg, Schalke and Stuttgart all feature in the top 20 alongside Bayern Munich, who, in fourth position, take their place among the real powerhouses of European football. However, there is one area where not even England, Spain and Italy’s finest can touch the German record champions – commercial revenues.

Bayern earned almost €173 million from commercial revenues, more than the entire revenue streams of clubs such as Manchester City, Tottenham Hotspur and Olympique Lyons. This represents over €20 million more than Real Madrid in second spot and is over half of Bayern’s total revenue, an increase of nine per cent over the previous season.

Sponsorship and marketing make up just under half of the overall commercial revenue (€82.6 million). This is due to the array of sponsors Bayern have been able to attract. The club has Europe’s most lucrative shirt sponsorship deal with Deutsche Telekom, who area also Bayern’s main sponsors. Bayern are guaranteed €22.5 million a season. Total merchandising brought €39 million last season.

Bayern are in a unique position to attract mega sponsors as the undisputed largest club in Europe’s largest economy Germany. They are also the only German club with a genuine worldwide profile, increasing their attractiveness to potential sponsors.

Germany’s Bundesliga is the best attended football league in the world in terms of average attendance and the third best sporting league behind the Indian Premier League and the NFL, with an average attendance of almost 42,000 in 2009/2010.

However, the Bundesliga, as an organization, insists on keeping ticket prices low. German clubs lag behind their foreign competitors in terms of matchday revenue. Just 21 per cent of Bayern’s total revenue is brought in during matchdays.

It is tempting for the Bundesliga teams to capitalize on their greatest asset –the fan base. Germany possesses the largest television market and yet pay-television has not been the roaring success in Germany as it has been in England and Italy, two other countries where Sky are dominant. Germany are only too aware of the pitfalls of too much reliance on television, as happened with the Kirsch crisis in 2003 when the Group went bankrupt.

Italy

In Italy, Juventus, Roma, Inter and Milan remain the four biggest clubs. But the highest Serie A representatives, the Rossoneri, sit in seventh. Comparing Italy to the rest of the three top leagues – England, Spain and Germany – a noticeable trend emerges with a lesser share of the Italian teams’ profits coming from gate money, including season tickets and memberships.

No Serie A team in the Top 20 earns even a fifth of their revenue from gate receipts and comparing that to the Premier League, La Liga and the Bundesliga top earners shows that a significantly larger margin comes from ticket sales.

The top two Italian clubs, Milan and Inter, are completely dwarfed by not only the likes of Real Madrid, Manchester United and Arsenal, but also teams that would not be considered among Europe’s elite such as Tottenham or Hamburg. Even Inter’s treble success last season, which increased their matchday revenue by over 30 per cent, still sees that area only comprise a modest amount of their revenue.

A number of issues effect the bottom line – including low attendances in several cases. In fact the Serie A on average trails the other top leagues in attendance figures. Consider that Sky broadcasts every match domestically and also the violence and abuse that has unfortunately reared its ugly head at matches, going to football is not perceived as a suitable family form of entertainment on a wide scale in Italy. Another issue is the current state of many of the stadiums. Outdated, compared to their counterparts in other top European football nations, those stadiums are also not owned by the clubs themselves, meaning they miss out on potential revenue from souvenir shops, team museums and corporate hospitality.

In 2009/2110, broadcasting rights accounted for over half of the revenue earned by Serie A clubs. Previously, individual clubs competing in the top division had the opportunity to sell their broadcast rights in Italy, but starting from this season they have moved to a collective bargaining type agreement, similar to the Premier League, meaning the supreme Serie A clubs will likely be heading for a drop in this sector.

For both this season and the next, a €1,149 billion deal was signed with Sky for domestic television rights and €181.5 million contract with MP & Silva for international distribution. Forty per cent of that money will be shared between the clubs evenly, while 30 per cent is allocated according to each team’s fan base.

But Italian clubs cannot remain over reliant on just broadcasting revenues, which make up 62 per cent of Inter’s and 60 per cent of Milan’s total earnings.

In terms of commercial revenue, Serie A sides are able to earn an amount comparable to their English counterparts in the Top 20, other than the far reaching Manchester United. Still, Milan, Inter and Juventus all lag behind the likes of Bayern Munich, Real Madrid, Barcelona and Schalke and this is something the Italians must work on if they want to compete with their European rivals economically in the long run.