Season review
PSV finished runners-up as it waits to regain the Eredivisie it last won in 2018. It was the third trophyless season for the decorated club as it exited the KNVB Cup at the quarter-finals and UEFA Europa League (UEL) at the round of 32 stage.
Financially, the impact of COVID-19 and a subdued transfer market saw PSV record its first loss in over a decade.
This article analyses the 2021 finances of PSV.
Revenue
PSV saw its core revenue fall from €63.2m to €49.2m (22%). This was driven by COVID-19 and the lack of fan attendance in the 2020/21 season.
It is worth noting that PSV recorded significant other income of €21.7m. This was largely attributable to governmental support provided in the wake of COVID-19 and is likely to fall away next season. It did however offset the revenue lost in the year with total income remaining relatively flat at €70.9m.
Matchday
Matchday revenue fell from €12.2m to €1.5m (87%) as the club played most its matches without fans. With restrictions still in place in the Netherlands in 2021, matchday revenue will not fully recover until next season.
Broadcast
Broadcast revenue rose from €18.8m to €20.2m. This was driven by improved performance in the UEL but was also helped by further progression in the KNVB Cup and an improved Eredivisie finish. In an act of solidarity with Dutch football, PSV agreed to pay €0.5m of its UEFA distributions to the Eredivisie for redistribution among the Dutch football pyramid.
PSV will be reliant on qualification for the UEL knockout phases for broadcast revenue growth in 2022.
Commercial
Commercial revenue fell from €32.2m to €27.1m (16%). This was driven by an inability to meet its commercial contract obligations due to playing behind closed doors. This should bounce back in 2022.
PSV had a tough financial year like most clubs as it battled with the financial impact of COVID-19. A return of fans to the Phillips Stadion will be a big boost to finances. The level of revenue in 2022 will be dependent on UEL performance with much of the rise in matchday and commercial revenue anticipated will be offset by the lack of government support that will be present next year.
Operating costs
PSV reduced its operating costs slightly from €87.7m to €80.6m (8%) as it managed to save some costs during the pandemic.
Wages
The wage bull remained flat at €47.2m as the major cost of the club was fixed before the season and therefore could not be reduced in great sums. As a result of declining revenue, PSV saw its wages to revenue ratio increase from 74% to 96%. UEFA recommend a maximum ratio of 70% as financially sustainable which PSV far exceeded due to COVID-19. Due to the short-term nature of this and the usual level of around 70%, this shouldn’t be too great a concern.
Other costs
PSV’s other costs fell from €40.6m to €33.4m (18%) as competition related costs fell.
PSV’s revenue was subdued in 2020/21 and its operating costs could not be flexed significantly to match this. Looking ahead, PSV will likely need to reduce costs due to the absence/reduction of government support.
Transfers
PSV was a victim of the more subdued transfer market ahead of the 2020/21 season. Clubs in general approached the market with caution with transfer activity significantly reduced overall. PSV purchased Max (€8.0m), Sangare (€7.0m) and Muller (€0.5m) joined the club for a combined (€15.5m). Exiting the Phillips Stadion were Lammers (€7.0m), Zoet (€1.5m), Hendrix (€0.5m) and Ruiter (€0.2m) for a total €9.2m.
PSV hence recorded a net transfer spend therefore of €6.3m. This was only the second net transfer spend recorded by the club in the past six seasons.
Amortisation
Player amortisation charges rose from €22.3m to €28.8m (29%) on the back of its player purchases. Reduced spending in the 2021/22 summer transfer window may see this number decrease depending on winter transfer window activity.
Profit on player sales
PSV recorded a profit on player sales of €7.9m. This was significantly lower than the €46.9m recorded in 2020 as they suffered from a quieter transfer market. The significant sales of Malen and Dumfries in the 2021/22 summer transfer window will see PSV’s profit on player sales back at these levels.
Transfer debtors / creditors
PSV was a net transfer creditor, owing more in transfer fees than it is owed by other clubs. In 2021, PSV owed €50.2m in transfer fees while only being owed €7.3m, a net creditor position of €42.9m. 2021/22 transfer sales should reverse this.
Transfer sales are a significant part of the business model operated by PSV. The fact it was not as lucrative in the 2020/21 season therefore had a sizeable impact on profitability. This is however likely only a short-term issue with following a return to receiving sizeable transfer fees in the current season.
Profitability
PSV recorded its first loss in over a decade as it felt the impact of COVID-19 but to a greater extent a quiet transfer market.
Operating profit / loss before player trading
Before player trading operating losses nearly halved from €17.1m to €9.7m (43%). While revenue declined significantly, government support meant total income remained at a similar level. This was combined with a decline in operating costs and hence improved profitability. Government support is likely to be much more limited in 2021/22 and therefore the size of any revenue increase in 2022 will be important.
Operating profit / loss after player trading
After player trading, an operating profit of €7.5m swung to a €30.6m loss as a result of lower transfer sales. With the sales of Malen and Dumfries in 2021/22 to date, PSV should return to a profit in 2022.
Profit / loss before tax
Due to €0.8m of finance costs in 2021, PSV recorded a loss before tax of €31.5m.
The 2021 financial results highlight the importance of the transfer market to PSV. The bear market conditions in 2021 hence saw the club suffer. A more bullish 2021/22 market helped the club ensure this loss is likely a blip but will be wary of the level of revenue growth in the absence of government support in such great quantities.
Final Remarks
PSV will be hoping for a financially better 2021/22 following increased player sales. Revenue was depleted in 2021 but was offset by government support. With revenue still not likely to complete recover in 2022 due to COVID-19 restrictions still being partly in place, total income may fall. UEL performance may therefore be important to PSV returning to profitability in 2022.
Thanks for reading our article, for a FREE summary of the key financial data from PSV’s 2021 results, please click the button below.
We would also love to hear any feedback on this article, our website or if you would like to contribute! Please use the form below and have a great day.
