This article analyses FC Porto finances in respect of the 2020/21 season.
FC Porto relinquished its Primeira Liga title in 2021 to Sporting Lisbon to the disappointment of the fans. Despite a trophyless season, FC Porto will be proud of its UEFA Champions League (UCL) performance. Semi-final defeats in both domestic cups meant it was a disappointing season all round domestically.
FC Porto finances were however significantly boosted by reaching the UCL quarter-finals. This, and significant player sales led to the highest ever profits recorded by the club.
Revenue rose from €152m to €89m (72%) as FC Porto reached the UCL quarter-finals.
Matchday revenue fell from €8.5m to €2.0m (77%) as the season was played without fans in attendance. The return of fans in greater numbers (still restrictions) means that the majority of matchday revenue should be recovered in 2022.
Broadcast revenue more than doubled from €50m to €125m (152%). This was as a result of FC Porto reaching the UCL quarter-finals. FC Porto received €74m in UEFA distributions compared to just €10m in 2020.
Revenue growth was also driven by revenue from the 2019/20 Primeira Liga season being recorded in the 2021 financial year. This is due to the end of the 2019/20 season falling into July, with FC Porto’s 2020 financial year ending in June. As a result of this, €6.3m of deferred revenue was recorded.
FC Porto’s UCL performance will be key to its 2022 revenue with qualification to the knockout stages vital to avoiding a large revenue reduction.
Commercial revenue fell from €31m to €25m (17%) due to restrictions in the 2020/21 season limiting corporate hospitality and sponsorship activation opportunities.
A new back of shirt and sleeve sponsorship deal with crypto platform Binance which will help drive commercial growth.
Operating expenses rose from €144m to €149m (3%). Limited costs growth and soaring revenue resulted in its record profits.
FC Porto’s wage bill rose from €90m to €100m (11%). This was due to some performance bonuses from the 2019/20 season being paid in the 2021 financial year (€9.5m). In addition, the club paid significant bonuses to its players for performance in the UCL.
Other operating costs dropped from €54m to €49m, predominately from costs savings due to games being behind closed doors.
Porto managed to generate significant player sales despite a more cautious transfer market. In came Evanilson (€8.8m), Taremi (€4.7m), Zaidu (€4.0m), Martinez (€3.2m) and Sarr (Loan – €2.0m) for a combined €23m. Departing the Dragão were Silva (€40m), Telles (€15m), Zé Luís (€5.5m), Soares (€5.4m), Osorio (€4.1m), Pereira (Loan – €4.0m), Janko (€1.9m) and Fernandes (€0.3m) for a combined €76m. This resulted in a net transfer spend of €53m.
Player amortisation charges fell from €45m to €30m (34%). This was due to Aboubakar and Zé Luís impairment charges in 2020 which were not present in 2021.
Similar spending in the 2021/22 season will likely result in a similar level of player amortisation in 2022.
FC Porto recorded a profit on player sales of €75m compared to only €0.6m in 2020. This had a huge impact on FC Porto finances. Player sales so far in 2021/22 has been only €21m, which would lead to a huge drop in profit on player sales.
Porto does not outrightly disclose its transfer debtors and creditors. However, using trade receivables and payables as a proxy, it appears it is a net transfer debtor position. This means it is owed more in transfer fees from other clubs than it owes.
Porto recorded its highest ever profit in 2021 as it benefitted from significant player sales and its UCL performance.
Before player trading, FC Porto recorded an operating profit of €7m compared to a €54m loss in 2020. This was solely driven by UCL performance. Failure to qualify for the UCL knockout stages would therefore have a seismic impact on its finances.
After player trading, FC Porto recorded an operating profit on €52m compared to an eye-watering €99m loss in 2020. This highlighted the financial importance of player sales to its finances. The drop in player sales in 2021/22 so far will hence have a sizeable impact on profitability.
Net finance costs of a relatively large €20m saw FC Porto recorded a profit before tax of €32m.
Despite record profits, debt levels in 2021 rose as FC Porto received external funding.
FC Porto’s cash reserves rose from €6.0m to €8.7m. Cash outflows from operations of €35m and capital expenditure of €0.7m were absorbed by cash inflows of €2.9m from player transfers and €35m in new financing.
As record profits were in part driven by player sales which were not yet due for payment, FC Porto took on new financing to tide the club over. The disclosures on loans are not clear, however it appears a large portion of its debt relates to factoring of transfer fees. This brings forward payments on players already sold.
FC Porto’s debt increased from €246m to €301m.
Net debt hence increased from €240m to €292m.
Thanks for reading our article, for a FREE summary of the key data from FC Porto’s 2021 finances, 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.
Go to the full page to view and submit the form.
Newcastle United finances were hit by COVID resulting in a second successive loss to end…
Aston Villa finances were boosted by broadcast revenue deferrals, reducing its heavy losses, but still…
FC Barcelona finances were hit hard by COVID-19 and the aftermath of its poor player…
This article analyses Leicester City FC finances in respect of the 2020/21 season. Season…
Liverpool finances were boosted from a drop in costs and increased player sales as losses…
Valencia finances were affected by COVID 19 and rebates, the club also oversaw an unprecedented…
This website uses cookies.