Will Ajax’s Improving Financial Situation Lead to European Glory Again?

Posted By Peter Taberner on October 9, 2019

Ajax are celebrating an upturn in its financial fortunes. Will this translate to sustained success on the pitch?

The Dutch giants are currently atop their UEFA Champions League group as well as the Eredivisie. While losing their two top prospects from last season–Frenkie de Jong and Matthijs de Ligt–they’ve kept their remaining core of talent.

Ajax is renown for developing talent. They may now be in a position to actually keep that talent and buy reinforcements.

Ajax’s improving financial position

Ajax recently announced that turnover has more than doubled in the 2018/19 season, mainly due to their memorable run to the UCL semifinals.

The figures from the Dutch giants revealed that gross revenue up to June 30 climbed to €199.5 million, a year-on-year rise from €93 million.

Income SourceIncome Total
UEFA Champions League Run€77.9M
Player Turnover€133M
Commercial Revenue€34.3 million
Ticketing from UCL€15.3 million
Overall, football related turnover rose by a staggering 280% compared to the 2017/18 financial year, accounting for €133 million.

Alongside the run in the Champions League, which included unforgettable victories over Juventus and Real Madrid, Ajax won a domestic league and cup double, making last season the successful for the club so far this century.

Payments that were received from UEFA spiraled by €76.8 million up to €77.9 million.

The run to the last four of Europe’s most prestigious competition resulted in additional ticketing revenue of €15.3 million.

Ajax also set a new record for average attendances at the Johan Cruyff Arena of 52,258.

Additionally commercial revenue received a boost, with a hike up to €34.3 million, a growth rate of 14.7%.

Ajax to challenge for European glory?

Yet even with this financial boost, are Ajax now in a better position to challenge for the Champions League again this year?

If so, it would be the Amsterdam club’s fifth European Cup or Champions League triumph. This includes a hat trick of victories in 1971, 1972 and 1973, in an era inspired by Rinus Michels’ “Total Football”.

Its an achievement that has only been matched by Real Madrid (twice) and Bayern Munich.

This year’s football money league produced by Deloitte would reveal that from a financial point of view, Ajax should remain some distance away from a Champions League challenge.

Despite the rise in turnover to €199 million, it falls way behind the richest clubs in Europe, with Real Madrid leading the table with revenue of €750 million.

Los Blancos’ great rivals, Barcelona, were in second creating a €690 million, while Manchester United reached an appropriate €666 million.

In fact, Ajax’s new found wealth from last season only eclipsed West Ham’s income of €197.9 million in the top twenty most affluent clubs.

If money keeps coming in, Ajax has the infrastructure to dominate

Ajax have long been lauded for the conveyer belt of talent that its youth academy infrastructure has produced.

Historically there have been periods where Ajax have pulled off huge success, reaping the rewards from nurturing young players, only for them to be sold off to Europe’s most wealthiest clubs.

In 1995 after Louis Van Gaal masterminded the club’s last European Cup win, the most sought after players soon found new pastures.

Edger Davids and Edwin Van De Sar eventually left for Juventus. Clarence Seedorf left for Real Madrid and then to AC Milan, where he won three more Champions League titles.

The De Boer brothers Ronald and Frank departed for Barcelona. They were joined by Patrick Kluivert, who scored the winning goal coming on as a substitute in that 1-0 win over AC Milan in Vienna.

History has repeated itself this summer, as Frankie De Jong has also left for Barcelona. Former club captain Matthijs De Light set his sights on Italy, moving to Juventus.

Kasper Dolberg went to join Sir Jim Ratcliffe’s revolution at Nice, where he will play under the leadership of Patrick Viera.

Ajax have though managed to keep hold of several leading lights from the squad last season, and have signed forwards Hakim Ziyech and David Neres on new long term contracts.

Talented midfielder Donny van de Beek remains at the club despite reported interest from Real Madrid, and has said that he will not leave the club in the January transfer window.

The squad has also been boosted by several arrivals this summer, including Quincy Promes from Sevilla for €15.6 million, and centre-back Edson Alveraz from Mexican side Club America for €15 million.

In keeping with the club’s tradition, 23-year-old prospect Razvan Marin was also signed from Standard Liege, who has acquired the nickname the “Romanian Xavi”.

In total the club made a transfer surplus of €148.4 million.

Dr Rob Wilson, head of department for finance, accounting and business systems at Sheffield Hallam University, and commentator on football finance issues, said: “There is the potential to reinvest in the playing squad. That’s where the impact will be most keenly felt, particularly with the summer departures.”

“Next they continue to reinvest into the academy structure to maintain their excellent track record of producing talent.”

He added: “I think that it’s fair to say that Ajax overachieved recently given their modest budget. We have to remember than most of the major clubs in Europe, the top six to eight clubs at least, have significantly larger revenue budgets.”

“Prize money is one small component, with broadcasting and commercial revenues much larger elsewhere.”

“It will certainly help them be competitive but they need to retain talent to maintain their level of playing performance. This revenue may be a one-off so shouldn’t be budgeted for on an ongoing basis.”

Financial Odds Stacked Against Ajax

Ajax’s main rivals to win the Champions League includes a robust challenge from English clubs. Manchester City will be looking to win their first European Cup, and have strengthened in the close season signing Rodri and Joao Cancelo.

Liverpool will also be strong contenders, and have proved in reaching the last two finals that they are so difficult to beat over two legs.

Barcelona will be looking to avoid the collapses against Roma and Liverpool over the past two seasons, and have also added Antoine Griezmann from Atletico Madrid.

Juventus will also be looking to rectify their poor record in the competition in recent years, where they have lost their last five finals.

The Turin club have built a considerable squad, with the free transfers of Aaron Ramsey and Adrien Rabiot to add to the purchase of De Ligt.

Although data from KPMG’s Football Benchmark report, highlights just how increasingly difficult it is becoming for teams who are not from the big five leagues of England, Spain, Italy, Germany and France in succeeding in the Champions League.

In the past five seasons, Ajax are the only club from one of the smaller leagues to make it into the semifinals.

Only four teams have made it to the last eight from outside of the big five divisions, and just 16, or 20% of teams, have reached the last 16. The figures show just how many sides fall at the hurdles in trying to reach the final.

It’s a set of circumstances that can be argued to perpetuate the financial dominance of the big five leagues.

The latest UEFA club competition cycle between 2018 and 2021 ensures that the Champions League winner receives €82.5 million.

A starting fee of €15.25 million is rewarded, with €2.7 million for each win at the group stage.

If a team progresses into the quarterfinals the remuneration will be €10.5 billion, with a further €12 million to reach the semifinals. Progress to the final will result in a payment of €15 million, plus a further €4 million if you win the final and lift the trophy.

In an attempt to re-balance the proceeds from European competition, UEFA have designed a new revenue distribution cycle.

It now comprises of a four pillar system, with a coefficient rating system implemented for over the past five seasons, alongside starting fees, a market pool and a performance related bonus.

Yet many, KPMG included, believes that a coefficient system will also lead to more reward for the biggest clubs.

Although that might not hurt Ajax too much as last year‘s semifinalists, they will have to defeat the financial probabilities if they are going to
become European champions for the fifth time.

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