All EuroLeague clubs are losing

The study, reported by Eurohoops, outlined the financial and governance challenges EuroLeague will face in the future, highlighting the importance of the need to collaborate with all major basketball stakeholders, starting with the International Basketball Federation (FIBA).

The report, prepared by Cem Karamürsel, who also works with the EuroLeague Head Coaches Board, highlights the economic problems faced by EuroLeague clubs, and also talks about administrative difficulties.

Some of the topics in the report are as follows:

All EuroLeague clubs are losing money. Except for ALBA Berlin, there is no team with clear numbers.

Starting to compete in the Basketball Champions League, Brose Bamberg managed to make a profit after the 2018-19 and 2019-20 seasons, but this was also one of the results of the team’s lower wages to the players.

While the management style of the EuroLeague is very complex, its economic model is not sustainable for the clubs. Rules like Financial Fair Play, on the other hand, can still be bent, adapting to owners who are willing to put money out of their pocket. According to the results of the study: “In the 2022-23 season, FPSFP (Financial Play Stability and Fair Play) regulations will still be open to owner contributions, close to 50%. This shows that there are still teams above the threshold, which are losing almost half or more of the budget each year. Under these (economically irrational) conditions, a “normal” business goes bankrupt after a relatively short time.”

According to IMG’s data, the partnership with the EuroLeague is profitable for IMG, even though the joint venture made a total loss of 7 million euros. According to the report: “We can say that the partnership established by IMG with EuroLeague is profitable. In addition to the promotion of the EuroLeague, IMG generated €54.1 million in revenue for technical and production services.”

Also, there is no public information about the EuroLeague’s definitive contribution to the clubs. However, some club representatives have repeatedly complained that the champion’s total payouts from the EuroLeague could not even cover the achievement bonuses of the players and the coaching staff.

Fenerbahçe Beko, one of the clubs whose detailed financial information is included in the report, has been called one of the most successful teams of the last ten years of the EuroLeague. What is written about Fenerbahçe Beko in the report is as follows:

The club submits an annual report. In the 2018 report, detailed information was available for all sports branches. In the following years, only aggregate figures were published. For this reason, we cannot do a multi-year trend analysis for the basketball division. Despite this limitation, we believe our analysis of 2018 will still be relevant for this study as 2018 represents one of the club’s most successful years. The club, which won the EuroLeague in 2017 and reached the final in 2018, had to have maximum profit potential.

In 2018, the club’s direct income from basketball operations amounted to TL 45.3 million (Euro 7.9 million). Total revenue is 18.9 million Euros with full allocation of sponsorship revenues and tax subsidies. Direct expenses were 158.8 million TL (27.8 million Euros) and the club had a (minimum) 8.9 million Euro deficit. It should be noted that the EUR/TRY exchange rate has deteriorated significantly since 2018 and moved from 5.71 to 17.69 (210%) in June 2022, placing a significant burden on the budgets of Turkish clubs, especially since the salaries are EUR or USD.

The report concludes: “Overcoming managerial woes should be the number one priority of shareholder clubs within the EuroLeague system, especially given the departure of EuroLeague CEO Jordi Bertomeu. It is the first of the steps to be taken in order to draw a curtain on both financial and managerial issues, and to restore trust and order, especially by reaching an agreement with FIBA. Transparency, accountability and integrity; Regardless, it should be the most important principles. The changes that need to be made in the structure of budget structures and decision-making mechanisms must be made urgently.”

“If key executives and decision makers in European basketball fail to put their egos aside and work together, the current crisis will lead to much bigger ones and European basketball will continue to lose interest.”

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