This article analyses Vitesse finances in respect of the 2020/21 season.
Season review
Vitesse had one of its best seasons in 2020/21 in recent times. The club finished 4th in Eredivisie, its highest position since 2013. The club was also unlucky runners-up in the KNVB Cup to a strong Ajax side. Vitesse’s fourth place finish also secured qualification for the inaugural UEFA Europa Conference League (UECL). This marks an end to a two-year absence from UEFA club competition.
Vitesse finances were however impacted by its European absence, loss of matchday revenue and no player sales. The club unfortunately recorded a €6.8m loss, its third consecutive season of losses.
Vitesse Finances – Revenue
The Vites saw its revenue decline from €16m to €11.6m (27%) as it felt the impact of games behind closed doors. This impacted both its matchday and commercial revenue.
Vitesse also recorded other income of €1.1m compared to nil in 2020. This relates to Dutch government subsidies (TVL).
Total income hence fell from €16m to €12.7m (21%).
Note: Vitesse’ accounts do not provide a breakdown of revenue by matchday, broadcast and commercial revenue. This unfortunately reduces the ability to analyse its revenue streams.
Matchday
Matchday revenue was heavily impacted by matches being behind closed doors with only one game attended by fans in the season. The return of fans (with restrictions) should recover a healthy portion of this revenue.
Broadcast
Broadcast revenue would have been impacted far less by events in 2020/21, with most of the impact felt in 2020. The return of the club to Europe will provide greater broadcast revenue in 2022. The club has qualified for the UECL knockout phases which should boost revenue further. Vitesse will be hoping to qualify for the UECL again in the 2021/22 season.
Commercial
Commercial revenue would have been hit by games being played without spectators. This significantly reduced the ability of the club to monetise commercial opportunities. The return of fans and a new shirt sponsorship deal with eToro will hence boost commercial revenue.
Vitesse Finances – Revenue summary
The revenue of Vitesse was like most clubs, significantly impacted by recent events and a season without fans. The return of fans, to Europe and a new shirt sponsor will see revenue rise in 2022.
Vitesse Finances – Operating costs
Operating costs fell from €24.3m to €17.9m (27%). This was largely due to government support for its employment costs and matchday cost savings.
Wages
Vitesse’ wage bill fell from €14.1m to €9.0m (36%) as Vitesse benefitted from government employment subsidies (NOW). This amounted to €4.5m compared to €1.3m in 2020, highlighting the support provided to clubs in these financial challenging times.
The wages to revenue ratio of the club fell from 88% to 77%. This is only slightly higher than UEFA’s recommendation of 70%. The increase in revenue in 2022 may see this ratio fall, however the likely reduction or loss of the government support is likely to offset this as wage costs rise.
Other costs
Other operating costs fell from €10.3m to €8.9m as the clubs saved on matchday costs.
Vitesse Finances – Operating costs summary
Vitesse managed to reduce its operating costs in-line with the reduction in its revenue. This was however supported by the government subsidy schemes which will likely be less available in 2022. The club will therefore need to continue managing its costs well as its revenue returns to normal levels.
Vitesse Finances – Transfers
The Vites had a very quiet transfer window. No players joined or left for a transfer fee as the club operated cautiously in a subdued market.
Result from player trading
Vitesse does not record its player amortisation costs separately from its profit on player sales. The club recorded an overall loss from player trading of €1.7m. This compares to a profit of €4.0m in 2020.
This was due to no sales in the year. Vitesse spent a small sum in 2021/22 to date which will see player amortisation charges rise. The club has again seen no outgoings so far in 2021/22 which will likely see a loss from player trading recorded unless any significant sell on clauses on past sales are triggered.
Vitesse Finances – Transfers summary
Vitesse has benefitted from player sales in recent years to boost its finances. This has however not been the case in the past two seasons which have compounded the impact of falling revenue, resulting in losses accumulating. Vitesse will be hoping to once again benefit from player sales as it recruits new young talent.
Vitesse Finances – Profitability
2021 saw Vitesse record its third consecutive loss, with its last profit uncoincidentally coming in its last season in the UEFA Europa League (UEL) group stages.
Operating profit / loss before player trading
Before player trading, Vitesse recorded an operating loss of €5.1m. This was an improvement on the €8.3m operating loss recorded in 2020. This was due to the club successfully cutting costs by more than revenue decreased. However, with €4.5m of the €6.5m cost decrease in the form of government subsidies, the majority of any rise in revenue will absorbed by the absence of this. Therefore, Vitesse is likely to record an operating loss (before player trading) again in 2022.
Operating profit / loss after player trading
After player trading, Vitesse recorded an operating loss of €6.8m. This compares to an operating loss of €4.3m in 2020. The lack of player sales hurt Vitesse profitability considerably. Unless the club has any sell-on clauses triggered this season or sees any significant player sales in the winter transfer window, another operating loss (after player trading) beckons.
Profit / loss before tax
Vitesse has minimal finance costs and therefore its loss before tax was €6.8m (2020: €4.3m).
Vitesse Finances – Profitability summary
Another loss in 2021 was due to a combination of falling revenue and low player sales. A return of fans and Europe will increase revenue, although the absence of significant government subsidies will absorb most, if not all of this. Therefore, unless any significant player sales or sell-on fees are triggered, Vitesse will record a fourth consecutive loss. Long term, the club will hope to return to the UEL, which is significantly more lucrative than the UECL.
Vitesse Finances – Assets / Liabilities
Vitesse provides little breakdown of its balance sheet making analysis challenging. However, it does appear the club is debt free, receiving all its ownership funding via capital injections, which was again needed in 2021 following its €6.8m loss.
Cash flow
Vitesse’s cash reserves remained relatively stable at €2.8m. This was due to cash outflows from operations (€4.3m) and investing activities (€0.7m), being absorbed by financing of €6.4m. This funding was all provided by its owner, Valeriy Oyf, by way of a capital injection and is therefore not repayable.
Debt
As mentioned above, Vitesse appears to be debt-free with all funding provided by its owner via capital injections (equity funding).
Vitesse Finances – Final Remarks
Vitesse has like most clubs, struggled financially through the pandemic. The return of fans and to Europe are welcome boosts. However stronger performances will be necessary in Europe to end its streak of losses and reduce the reliance on ownership funding.
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