This article analyses Feyenoord finances in respect of the 2020/21 season.
Season review
Feyenoord finances took a hit as the club had struggled both domestically and on the continent. A 5th placed Eredivisie finish was its lowest since the infamous 2010/11 season. This was compounded by another European season where Feyenoord failed to progress past the group stage. Feyenoord had not progressed past the group stage since 2014/15 of any European competition.
These struggles and lost matchday revenue led to Feyenoord recording a third successive loss, more than doubling to €17m.
Feyenoord Finances – Revenue
Revenue fell from €71m to €52m (27%) predominately driven by lost matchday revenue due to games being played behind closed doors.
Other income rose from €3.3m to €9.4m with Feyenoord receiving significant government support of around €8m. This led to total income falling from €75m to €62m (17%), a lower rate than the decline in revenue.
Matchday
Matchday revenue fell from €8.0m to €5.5m (31%) as most games were played behind closed doors. Feyenoord actually recorded only €0.7m of season ticket sales, however its fans waived €4.8m of refunds which was a huge financial boost to the club. The club will also be anticipating matchday growth from its new stadium in the coming years.
The return of fans in 2021/22 (still with some restrictions), should see matchday revenue recover in 2022.
Note: It is worth noting that for club competitions, Feyenoord records some matchday and broadcast revenue together which makes it challenging to get to a true picture of the exact split. The relevant figure is included in broadcast revenue.
Broadcast
Broadcast revenue fell from €23m to €14m (40%), largely as a result of the above note on the matchday and broadcast split. Underlying broadcast revenue was likely to be relatively stable, with a slight decline in league distributions due to poorer performance. UEFA Europa League (UEL) performance was identical.
Feyenoord’s 5th placed Eredivisie finish resulted in qualification for the inaugural UEFA Europa Conference League (UECL). this competition is less lucrative than the UEL and despite qualification for the knockout phases, is likely to result in a decline in UEFA distributions.
Commercial
Commercial revenue fell from €40m to €33m (18%). Despite new deals with TOTO, Disney and Blue Amigo driving sponsorship revenue growth, the restrictions in its hospitality offerings due to games being behind closed doors saw hospitality revenue decline €8.3m.
The return of fans in 2021/22 and a EuroParcs sponsorship extension should drive commercial growth in 2022.
Feyenoord Finances – Revenue summary
It was a challenging year from a revenue perspective as performance on the pitch did not help offset the lost matchday revenue. The return of fans will be a financial boost, however UECL participation means limited revenue growth opportunities elsewhere. Qualification for the UEFA Champions League (UCL) or UEL in 2022/23 will be vital to long-term revenue growth.
Feyenoord Finances – Operating costs
Operating costs fell from €75m to €66m due mainly to matchday costs savings.
Wages
Feyenoord’s wage bill fell from €39m to €37m (4%). There was minimal change in wages as Feyenoord managed to save some costs, likely due to minimal bonuses being payable after a disappointing season.
The wages to revenue ratio rose from 54% to 71%. This is still around the maximum limit suggested by UEFA which therefore should not be a cause for too much concern. The ratio should fall in 2022 as revenue growth likely surpasses wage growth.
Other costs
Other operating costs fell from €36m to €29m as Feyenoord made matchday costs savings among other savings.
Feyenoord Finances – Operating costs summary
The club managed its cost base relatively well as revenue fell, however this could not stop losses rising at operating level. Revenue growth is likely to exceed costs growth in 2022 which depending on the quantum could improve profitability.
Feyenoord Finances – Transfers
It was a quiet transfer market for Feyenoord as it was cautious given the lost revenue and uncertainty of the season. In came Antonucci (€2.2m), Teixeira (€1.6m), Diemers (€1.2m), Pratto (Loan – €0.5m), Spajic (Loan – €0.5m), Conteh (€0.4m) and Balde (€0.04m) for a combined €6.4m. Feyenoord did not sell any players for a transfer fee so recorded a net transfer spend of €6.4m.
This net transfer spend was its highest since 2001/02.
Amortisation
Player amortisation charges rose from €12m to €13m (7%) due to the investments made in its playing squad. Lower spending in the 2020/21 season to date should see this number fall slightly in 2022.
Profit on player sales
Feyenoord recorded a profit on player sales of only €0.3m due to no significant sales in the period. This compares to a still modest €4.0m profit in 2020. The club should see a rise in profit on player sales following increased transfer sales in 2021/22.
Transfer debtors / creditors
Feyenoord has minimal transfer debt or receivables due to limited transfer activity. The club is owed €2.9m in transfer fees while only owing €1.7m, a net transfer debtor position of €1.2m.
Feyenoord Finances – Transfers summary
Feyenoord has struggled to generate significant player sales in recent years. This has been one of the key differentiators on and off the pitch to its league rivals. In the past four seasons, Feyenoord has generated €22m in profit on players sales. Ajax has generated €283m and PSV has generated €101m, a large chasm between the three clubs.
Feyenoord Finances – Profitability
A third successive losses was incurred as the club struggled on the pitch without its fans.
Operating profit / loss before player trading
Before player trading, operating loss rose to €4.7m having been break-even in 2020. This was due to the fall in matchday and hospitality revenue. The return of fans will be a welcome boost. However, this may not improve profitability to a great extent given government support of around €8m is expected to the fall away. This combined with UECL participation may result in limited profitability improvements depending on cost growth.
Operating profit / loss after player trading
After player trading, operating losses more than doubled from €8.3m to €17.5m (110%). There was no significant player sales and therefore minimal contribution to profitability from this source. Higher player sales in 2021/22 should contribute to profitability in 2022.
Profit / loss before tax
Net finance costs of €0.4m saw losses before tax of €18m. This rose from €8.8m in 2022.
Feyenoord Finances – Profitability summary
It is not a coincidence that Feyenoord’s last profit coincided with UCL qualification. While the return of fans will boost matchday revenue, long-term profitability will be predicated on European performance, with UEL knockout stage progress each season a minimum requirement in order to achieve this.
Feyenoord Finances – Assets / Liabilities
Feyenoord required minimal outside funding as underlying cash flows remained strong.
Cash flow
Feyenoord’s cash reserves rose from €12m to €14m. Operating cash inflows of €11m absorbed cash outflows from player transfers (€8.2m) and capital expenditure (€0.9m). Financing cash inflows of €0.7m also boosted cash levels as €2m of new loans were largely offset by €1.3m of repayments on existing debt.
Debt
The club’s debt levels rose from €10m to €11m. These loans largely result to three existing loans secured against its stadium and training ground of €10m. The club also now has access to a €6.3m ABN Amro credit facility. Feyenoord was only utilising €0.8m of this at 30 June 2021.
Note: Due to agreed upon tax deferral arrangements, tax debts rose from €8m to €17m. This is not included above but was noted by the club.
Net debt
As a result of the above, Feyenoord’s net cash position improved from €1.8m to €2.9m.
Feyenoord Finances – Final Remarks
Feyenoord had a challenging season on and off the pitch as its finances suffered from poor European performance and but mainly lost matchday revenue. The return of fans in 2021/22 will result in revenue growth, however total income may not rise significantly due to the absence of government support. Long term revenue growth and financial health will therefore need to be driven by European performance and player sales, both of which have been disappointing in recent years. A stronger 2021/22 season will be needed to avoid its third successive loss continuing into its fourth or fifth year.
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