The only one in profit: Bayern is a model of success in finances too

The most famous German club, FC Bayern Munich, is the only one among nine selected European champions to have ended the season in the black.

For a long time, they have ranked among the most respected and successful football brands in the world. The Bavarian powerhouse from Munich is the flagship of all German football and a serial champion of the local Bundesliga. After all, the total value of the club organization is €2.62 billion, placing Bayern fourth in the world. On the pitch, Bayern’s dominance is so great that no other club in Germany has won the league title over the past nine years except the team from Allianz Arena. There’s also another important advantage. Unlike their rivals from Spain or Italy, top German clubs enjoy much stronger financial health. And a shining example of this is the best team in the Bundesliga. In the latest annual ranking by consulting company KPMG, titled The European Champions Report 2022, Bayern ranked highest among the nine evaluated clubs. It was the only club to finish the last league season in the black.

So not only did Bayern’s stars easily deal with domestic competition on the field, but the club's management also performed well. For the last fiscal year, the Bavarians reported a profit of €1.8 million. And this despite the fact that income from ticket sales and merchandising was kept to a minimum. For comparison, Spanish champions Atlético Madrid ended the period with a loss of €111.7 million, while Milan’s Inter—employer of Slovak defender Milan Skriniar—generated a loss nearing a quarter of a billion euros.

What is the secret behind Bayern’s—or more broadly, Germany’s—success? According to sports analyst Jozef Tokos, it's a combination of several factors. In a broader context, there is also a general societal approach or mentality at play. "The German state budget tends to be in surplus, and the values there differ from those of southern nations," Tokos told Economic Daily. Another factor is the mechanisms introduced by national football associations or UEFA to prevent clubs from accumulating excessive debt. "If we look at the top clubs by revenue, FC Barcelona and Bayern will have similar results. But then we look at the financial health of the clubs over recent years, and that’s a different story," Tokos points out. Clubs like Barcelona only realized too late that they had overspent financially, and now they must correct course. Bayern and German clubs in general, on the other hand, aim for a balanced transfer policy and do not pay excessive sums for new acquisitions.

The long-term philosophy of a specific club also plays an important role. At the turn of the millennium, Real Madrid launched the so-called Galácticos era, when the club signed the biggest stars at the peak of their careers for astronomical sums. These were top players, but further development was unlikely. A similar case in today’s Real Madrid is the €115 million transfer of the now-excess Eden Hazard. Bayern, by contrast, although its squad is also highly valued—specifically at €816 million—tries to sign top players whose best years are still ahead of them. These players can serve the club well for many years, and their market value may even increase over time. Examples include Alphonso Davies, Kingsley Coman, and Niklas Süle. That’s why, according to Tokos, the question arises whether "Bayern couldn’t afford to dip a little more into the red in pursuit of sporting goals." In any case, the future of the Munich club looks promising.