2006/2007 Financial Results
By: Inara | September 25th, 2007
Today, OL Groupe published information on the club’s economic situation for the 2006/2007 season. And naturally, it’s tres tres positive. If you want to read the report in its entirety, go here. But since I adore math and numbers so much, I will offer you guys a much more condensed and easier to understand overview.
The reason I’m even bothering to report this (to my knowledge, I’m the only blogger on the Offside who even cares about club finances) is because economic development is responsible for Lyon being where it is - and where it will be in the next few years (read a more thorough overview on club finances here). There are no rich investors to aid Lyon in their quest for global domination. Every penny the club has ever earned has been due to the brilliance and dedication of Jean-Michel Aulas.
We love you, Jean-mimi.
Anyway, so here’s the good news. Lyon’s revenue has jumped 28% to reach €214.1m (the previous year it was at €166.1m). Excluding sale of player contracts, the revenue is €140.6. Net profit is up by 16% at €18.5m. This is after paying €10m in taxes, btw. For those of you who follow clubs in Serie A and the EPL, where clubs are regularly in the red - yes, it is possible to make a profit.
As most of you know, Lyon is the first French club to be floated on the stock market, which it did in February 2007. OL Groupe has reported it as a success, with offers oversubscribed 6.5 times. OL Groupe raised €90.6m. As of June 30, 2007, net cash stands at €128m and shareholders equity at €151m.
Third and fifth columns represent percentage of total turnover (revenue).
BREAKDOWN
Gate receipts (ticketing): This went up 2.4% to bring in €21.5m (due to the fact that 27 home games were played at the Gerland last season, as opposed to 26 from the season before). Despite the loss of possible revenue by missing out on the Champions League quarterfinals, Lyon’s participation in the French League Cup final offset that loss. A record 1,012,000 spectators came to the Gerland in 2006/2007.
Sponsoring and advertising: There was an increase of 29.8%, yielding €18.1m, thanks to improved deals with Accor Group and Umbro.
Broadcasting: This sector improved only slightly, going from €68.9m to €69.9m. Domestic rights increased but international rights fell by 12.4% for three reasons: Three French clubs participated in the Champions League in 2006/2007, Lyon did not participate in the quarterfinals of the Champions League, and the French share of European rights declined.
Other sources: This includes merchandising, derivative products, OL Images, and others and brought in €31m, up 30.6%. Lyon sold 200,000 shirts in 2006/2007, up from 110,000 the season before.
Sale of player contracts: This totaled €73.5m, a rise of 91.3%.
What Lyon will do with the money:
The bulk of this money will go towards the building of OL Land, which includes the new stadium (more details here). Despite facing some opposition from the Decines community, the target is to start building by September 2008. Once building starts, the club will look into the sale of marketing rights (including giving the stadium a name). In fact, the club have already taken a step in that direction by closing a ten-year deal with Sportfive that is worth €28m. Sportfive, a subsidiary of Lagardere Sports, helps clubs broker deals with companies over stadium naming rights.
The new stadium will cost between €250m to €300m.
Additionally, Lyon are building a new, state of the art academy building according to the strictest environmental guidelines. Given that 9 out of the 27 players on the professional squad are homegrown, Lyon would like to confirm their role as developers of elite players. Plans are to open this building by June 2008.
Outlook:
Given the club’s growing platorm not just in France but also in Europe, OL Groupe are attempting to match the needs of the club by providing a stable and ever-increasing source of income. Already the results are visible, with Lyon a regular member of the top 20 richest clubs in the world, both in terms of revenue and marketability.
The goal is now breaking the top 10.
Category: 
Subscribe
|
Print
|
Share
      |
Comments
-
JMA may not be a popular president (for non OL fan’s), but he is the main reason for Lyon’s success.
I don’t know how long he is going to stay as the president in OL, but we will grow as long as he is here.
Posted from
Japan
-
Actually I do care about football finance as well.
Good to see Lyon being in a very healthy situation. And our godfather Bob just posted something about Arsenal’s record profits a few days ago as well. Which sort of gets your EPL debt argument in trouble. Operating profits of $103.7 million, before player trading and depreciation isn’t bad for an EPL club, or any club for that matter.Posted from
Germany -
Yeah, but Manchester United and Chelsea are in a lot of debt, Especially Manchester United. Arsenal has some debt as well.
L1 clubs are not allowed to run in the red.
Posted from
United States -
I think I love Lyon so much because of this. Real is actually profitable too even though the King writes off alot of their debts. Jean Mimi is an astute business man, and being a Business major I can appreciate just exactly what he is striving to do. He wants to make Lyon one of the big guns, and a new stadium and profitbaility shows he is on the road to success. Now if only he can get a capable coach…
Posted from
United States -
And Arsenal’s financial shape this year is largely credited to the new stadium, a fact I’m sure JMA has not overlooked. Since the change in financial regulations to allow French clubs to float I’m surprised that not more French clubs haven’t started to go down that route (though maybe I’ve missed that).
Posted from
United States -
Inara: I don’t think that the debt situation in the EPL is in any way critical (different to Serie A a few years back) as English clubs can very easily service those debts at the moment (and if the debts are down to new stadiums etc. it’s even less of a problem). I would also be surprised if the EPL as a whole won’t be generating lots of profits in the future, seeing the vast amounts of money that are pumped into this league from TV, sponsors, tickets etc. And I assume foreign investors wouldn’t be so interested in the EPL if it wasn’t for the promise of profits.
Posted from
Germany -
Corey: How I wish there was someone in France to wipe away the wage taxes. Okay, I don’t, but you know what I mean.
Storm: FC Istres recently floated. They are an L2 club but their stocks are doing relatively well. If any club floats next, I think it would be Toulouse.
Jan: For a club like Manchester United, having a big debt is not a hindrance to profit as the demand for the club is very high. But Leeds United is a tragic example of what happens when debts are unregulated. They went from being an EPL stalwart to being pushed into the depths of England’s lower divisions. Had there been any financial supervision in England, that situation would never have happened.
Posted from
United States -
Well Inara, as we have seen with Ronaldinho, he is having second thought about stayin in Spain because of taxes. French tax law may be restructured with the new president, along with that god dam lazy number of hours in the work week legislation. The French are to damn liberal for their own good sometimes!
Posted from
United States -
I didnt finish my thought on Ronnie, woops. With someone with such a high profile staying and payign taxes in Spain, the signs are that more players could do the same in France. A new stadium will attract players for sure, and Im sure Auluas has some under hand ways to shield his high earners from taxes.
Posted from
United States -
as much as i love football i wouldn’t want to turn france into some kind of capitalist’s wet dream for the sake of attracting better players. after all, money is the root of all evil.
Posted from
United States -
This might be a dumb question, but how come Abidal and Tiago weren’t included in the sale of players?
Posted from
Canada -
Money is the root of all evil…and all good football. What a conundrum.
TTJMM: Tiago and Abidal weren’t included because they were sold before June 30, 2007, so they fall under sales in the 2006/2007 year and are included in the numbers for last season.
Posted from
United States -
yes and no, Inara. chelsea have all the money in the world but they’ve got more headaches than all the advil in the world could cure.
Posted from
United States -
If OL`s season continues to be such a desaster it will be interesting to see next years figures. I do have the slight feeling that the club`s management had most certainly different/not to say higher expectations when preparing this season`s budget….
(and it is definitely shocking to see by how much the French club`s depend on revenues from broadcasting rights.)
Posted from
Austria
Comments are closed
Home 
