There’s no business like football business. At least, that’s what the 12th edition of the Deloitte Football Money League, which profiles the largest clubs in the world’s most popular sport, shows.

According to the report, the combined revenue of the Top 20 clubs was a whopping €3.9 billion (RM18.74 billion)  in the 2007/08 season.

Manchester United (MU) may be riding high in the English Premier League but in terms of financial performance as measured by the Deloitte Football Money League (EPL), MU, with €324.8 million, trailed Real Madrid with €365.8 million. Spanish league leader Barcelona was third with €308.8 million, followed by Bayern Munich (€295.3 million) and Chelsea (€268.9 million).

Hot on the Blues’ heels was Arsenal, with €264.4 million. Manchester City, under its new Abu Dhabi-based owners and boosted by the first year of new EPL broadcast agreements, made a return to the Top 20.

As they’re currently doing in European football, English clubs dominated the league. Of the Top 20, seven were from the EPL, four each from the Bundesliga and Italian league, and two from France.

Dan Jones, a partner with Deloitte’s Sports Business Group who compiled the Money League with a team of five others, noted that revenues from their successful participation in the UEFA Champions League propelled VfB Stuttgart and Fenerbahce to the Top 20 for the first time. Fenerbahce was also the first Turkish club to feature in the list.

The Money League was released in February and covers the 2007/08 season, the most recent period for which club revenue figures are available. Deloitte compared clubs using revenue from day-to-day football business operations split into three categories: matchday, broadcast and commercial. Excluded were player transfer fees, value-added tax (VAT) and other sales-related taxes.

This edition showed a 6% increase over the previous year and was more than three times the level in 1996/97 when the first one appeared. The period covered was before the worst of the economic slowdown so the impact on the revenue of the Top 20 clubs was limited, said Jones.

Jones also noted that the most obvious effect of changing economic conditions on this year’s Money League was the pound’s depreciation against the euro and the impact on the ranking of English clubs. Were it not for this, United’s record-breaking year in winning the Premier League and UEFA Champions League which boosted revenues to £257 million (RM1.39 billion), £45 million more than the previous year, would have placed it at the top of the list and denied Real Madrid a fourth consecutive year atop the rankings, he said.

Real’s ability to increase commercial revenue is what drives its remarkable revenue growth. In 2007/08, Real experienced a drop in this area mainly because of lower shirt sponsorship revenue following the bankruptcy of BenQ Mobile, although the club still generated €129 million from this source which made up 35% of total revenues.

Interestingly enough, and as pointed out by the report, the slowdown in commercial revenue coincided with David Beckham’s departure in the summer of 2007.

Real has announced that it is budgeting revenues of €400 million in 2008/09.

“Should it achieve this threshold, it will be difficult for rivals to replace Real at the top of the Money League next year,” predicted the report.

MU, which is aiming to reprise last season’s success in lifting both the European and Premier League titles, recorded increases across all revenue streams which contributed to growth of £45 million.

Sellout attendances at the 76,200-capacity Old Trafford and an increase in ticket prices in 2007/08 boosted matchday revenues by £9 million to £101.5 million. Deloitte noted that the amount, which represented 39% of overall revenue, was the highest from any Money League club from this source.

Barcelona, which kept its third place in the Money League from 2006/07, continued to draw most of its revenue (38%) from broadcasting. Despite being the only club in the Top 20 not to generate any revenue from shirt front sponsorship, Barca generated the third highest commercial revenue of all Money League clubs, noted the report.

Under its innovative five-year partnership with Unicef, Barca funds some of the agency’s projects although it does not get any revenue.

Chelsea, which finished runners-up to MU in both the Premier League and Champions League, kept its position in the top five but slipped one place to fifth following Bayern Munich’s significant revenue growth in 2007/08.

“Strong on-pitch performances have kept Chelsea in contention with the top European clubs, but the club needs new successes with its matchday and commercial revenues to deliver future growth and keep pace with its biggest European rivals,” said the report.

Arsenal’s revenue exceeded £200 million for the first time in 2007/08. Its second season at the Emirates Stadium, second only to Old Trafford in capacity, saw sell-out league attendances which drove matchday revenues to £94.6 million. The amount was 45% of total revenue.

Liverpool climbed one place to seventh in the Money League, helped by broadcast revenues of £76.3 million which formed 46% of total revenue. Economic conditions forced the postponement of its new stadium at Stanley Park which was scheduled to open in 2011/12. That would have enabled Liverpool to significantly increase matchday revenue and improve its standing in the Money League, said the report.

Despite this evidence of the current downturn affecting clubs, Deloitte is upbeat on the prospects for the Top 20. The fact that some of these clubs are deeply in debt doesn’t change its view.

An AP report on April 28 noted that after winning the Champions League and Premier League last season, MU posted pre-tax losses of US$65.2 million (RM232.76 million). It also noted that the richest English Premier League clubs are deep in debt, and made reference to a report by British lawmakers the week before last (week before April 28) which accused MU, Liverpool and Chelsea — the top three teams in the Premier League and No 2, 7 and 5 respectively on the Money League — of “financial doping”, or “reckless borrowing to maintain their domination”.

“Debt is not necessarily a bad thing for clubs — as long as it is manageable within the club’s existing operations, then it is sustainable and repayable,” said the Deloitte report, which likened football clubs’ debts to home mortgages.

Many people have mortgages on the homes in which they live; it is only when they are unable to service the mortgages that difficulties occur, it said.

“Overall, we expect Europe’s top clubs to be in a strong position to manage their debts,” said the Money League report, noting that many of these clubs are the elite of world football, and thus iconic brands in their own right.

As Jones wrote in his preface to the report: “Football is not immune to the difficulties caused by this changing environment. Nonetheless, we believe that the unique nature of the football industry, underpinned by loyal club fan bases and long-term broadcast and sponsor contracts secured in advance may enable major clubs to be relatively resistant to the economic downturn.”