Borussia Dortmund generated revenue of EUR 489,524 thousand in the 2018/2019 financial year. The decrease of EUR 46,519 thousand (8.68%) in revenue is due primarily to decline in transfer income, which decreased from EUR 222,733 thousand in the previous year to EUR 120,204 thousand. Adjusted for transfer income, revenue increased by 17.88% from EUR 313,310 thousand in the previous year to EUR 369,320 thousand.
Only transfer income remained below the previous year's level in the past financial year. Income from match operations, advertising, TV marketing and merchandising as well as conference, and catering and miscellaneous income increased year on year.
Borussia Dortmund recognises the revenue in the amount of the consideration that it expects to receive under the contract with the customer when (or as) the customer obtains control of the asset.
Revenue is recognised depending on whether the corresponding performance obligation is satisfied at a point in time or over time. Revenue from licences is recognised at a point in time when the right to use the Group's intellectual property is transferred, and over time when the right to access the Group's intellectual property exists throughout the licence period.
The performance of the individual revenue items is described in the following:
Income from match operations
Income from match operations increased by EUR 2,337 thousand to EUR 44,659 thousand in financial year 2018/2019.
Income from match operations for domestic competitions improved by EUR 787 thousand to EUR 28,214 thousand following moderate price adjustments.
Income from national cup competitions increased by EUR 444 thousand to EUR 2,680 thousand, despite the fact that the team did not compete in the DFL Super Cup. This was attributable primarily to two home matches in the DFB Cup.
In the current financial year, Borussia Dortmund impressed on the international stage with four wins, one draw and a loss, easily advancing from the group stage to the round of 16 of the UEFA Champions League, where it faced Tottenham Hotspur. By contrast, in addition to competing in the group stage of the Champions Leagues in the previous season, Borussia Dortmund also played two ties in the Europa League: against Atalanta Bergamo in the round of 32 and against RB Salzburg in the round of 16. On the international stage, Borussia Dortmund only hosted four home matches (previous year: five), generating EUR 7,480 thousand in income from standard and hospitality tickets (previous year: EUR 9,135 thousand).
The income that Borussia Dortmund generated in financial year 2018/2019 from friendlies, in particular in connection with the US tours, including the ticket proceeds generated by the club's other teams, amounted to EUR 6,285 thousand, representing an increase of EUR 2,761 thousand on the previous year.
The revenue from season ticket subscriptions at the beginning of the financial year are recognised over time. The proceeds received in advance are recognised as deferred income. They are reversed pro rata over the match days and recognised in profit or loss.
The revenue from the sale of match day tickets for all home matches is initially also recognised as deferred income and subsequently reversed and recognised in profit or loss on the date of the respective match.
Income from advertising
In the financial year ended, Borussia Dortmund increased its advertising revenue by 3.03% to EUR 96,813 thousand (previous year: EUR 93,962 thousand), representing a share of 19.78% of total revenue.
In addition to the kit sponsor, Evonik Industries, AG, the equipment supplier, Puma SE, the holder of the stadium's naming rights, SIGNAL IDUNA, and the sleeve sponsor, Opel Automobile GmbH, Borussia Dortmund's Champion Partners included nine other companies.
Borussia Dortmund saw a substantial increase in the number of national and product partners. The club also further stepped up its international advertising. A new stream of revenue is virtual advertising boards, which have been used on a regular basis during international live broadcasts of the first and second Bundesliga divisions since the start of the 2018/2019 financial year. Whereas fans in stadiums and viewers at home in the DACH region see the original adverts as they are presented, the stadium's existing physical advertising boards can be digitally overlaid in the broadcast signal to target different TV audiences when broadcasting matches abroad.
Furthermore, advertising income includes bonuses for the second-place Bundesliga finish, which directly qualified the team for the group stage of the UEFA Champions League in the 2019/2020 season, and for advancing to the round of 16 of the UEFA Champions League in financial year 2018/2019.
Income from advertising is recognised over the term of the respective contracts. The transaction price set out in a contract is recognised as deferred income at the beginning of the marketing activities and subsequently reversed and recognised as revenue on a straight line basis over the term of the advertising services. Invoices are issued in accordance with the terms of the agreements and accordingly fall due on the dates specified therein.
Income from TV marketing
In financial year 2018/2019, income from domestic and international TV marketing represented the highest share of revenue (34.19%) and increased by EUR 45,056 thousand year on year to EUR 167,349 thousand. Both the income from domestic and international TV marketing increased. Only the income from domestic cup competitions declined.
Income from domestic TV marketing amounted to EUR 98,110 thousand, up EUR 10,157 thousand against the prior-year reporting period.
This is due to DFL Deutsche Fußball Liga GmbH's TV agreement, which came into force on 1 July 2017 and provides for annual increases. According to the DFL's preliminary figures, 12.25% more was distributed for the 2018/2019 than in the previous year.
The income from international TV marketing improved by 114.39% from EUR 31,752 thousand in the previous year to EUR 68,073 thousand in the financial year ended.
In financial year 2018/2019, Borussia Dortmund advanced to the round of 16 of the UEFA Champions League and as a result received a considerably higher starting fee than it had received for playing in the round of 32 and round of 16 of the UEFA Europa League in the previous year.
UEFA's new revenue distribution system also entered into force at the start of the current financial year. Compared to the previous year, EUR 2.04 billion was distributed for the UEFA Champions League, an increase of 44.68%. In addition to the starting fees for the group stage, performance-based bonuses and the shares from market pools A and B, a new distribution share ("coefficient share") based on the coefficient ranking of the teams competing in the group stage was introduced at the start of the reporting year. The coefficient is calculated on the basis of the club's performance over the past ten years.
As in the previous year, Borussia Dortmund was eliminated in the third round of the DFB Cup. In the 2018/2019 season, Borussia Dortmund did not compete in the DFL Super Cup. Income from domestic cup competitions thus amounted to EUR 1,162 thousand (previous year: EUR 2,578 thousand).
Income from TV marketing is recognised in line with the respective season. The media income from national TV marketing is recognised as deferred income at the beginning of the marketing activities and subsequently reversed and recognised as revenue on a straight line basis over the course of the financial year. Income from international TV marketing is recognised in profit or loss when the service is rendered.
Income from transfer deals declined by EUR 102,529 thousand to EUR 120,204 thousand due to the departures of Christian Pulisic to Chelsea FC, Sokratis Papastathopoulos to Arsenal FC and Andriy Yarmolenko to West Ham United as well as compensation stemming from transfer deals in previous financial years.
The year-on-year decline in transfer income is due primarily to the remarkably high income that was generated from the transfers of the players Ousmane Dembélé to FC Barcelona and Pierre-Emerick Aubameyang to Arsenal FC during the 2017/2018 season.
Transfer income is recognised in connection with the transfer of a player. This transfers the exclusive right to early termination of the employment agreement at a certain point in time. Revenue is recognised once that right is transferred. The compensation stemming from the transfer deal falls due as stipulated in the agreement.
Income from merchandising
Merchandising revenue amounted to EUR 29,989 thousand, representing a slight year-on-year increase of EUR 490 thousand.
Revenue from the sale of fan merchandise is recognised when control of the merchandise is transferred. In accordance with the general terms and conditions, a voluntary right of return of 30 days from receipt of merchandise is granted. Revenue is reduced by the expected returns, which are estimated on the basis of historical data. In these cases, the Company recognises a refund liability and an asset for its right to recover products from customers on settling the refund liability, as well as a corresponding adjustment to cost of sales. Invoices are issued in accordance with the terms of the agreements and are generally payable within 14 days.
Conference, catering and miscellaneous income
Conference, catering and miscellaneous income amounted to EUR 30,510 thousand (previous year: EUR 25,234 thousand) and also included revenue from advance booking fees, rental and lease income and release fees for national team players.
Conference and catering income, which comprises income generated by BVB Event & Catering GmbH, the hospitality areas and events, increased by EUR 2,494 thousand from EUR 13,965 thousand in the previous year to EUR 16,459 thousand. Public catering income increased significantly by EUR 2,152 thousand. In contrast to the previous season, during which Borussia Dortmund played in the UEFA Europa League and thus five matches had to be scheduled for Sunday and one for Monday, the kick-off times of 14 Bundesliga home matches were primarily scheduled for Friday and Saturday, days on which significantly higher catering revenue is generated. The demand for food and beverages on match days for international club competitions also increased, by 33.87%, even though one fewer match was held.
Income from non-match-day events also increased. Income from the hospitality areas remained level since these areas again operated at full capacity.
Advance booking fees and postage amounted to EUR 4,360 thousand in the current financial year, remaining virtually level with the previous year's EUR 4,365 thousand. As in the previous year, 23 home matches were held in Dortmund during the current financial year.
In the reporting period from 1 July 2018 to 30 June 2019, miscellaneous income, which includes the Evonik football academy, rental and lease income and BVB TV, increased by EUR 638 thousand to EUR 6,941 thousand.
Release fees for national team players also increased, rising from EUR 2,149 thousand to EUR 2,750 thousand. This was due primarily to six Borussia Dortmund players being selected for the World Cup.
Other operating income improved by EUR 3,854 thousand year on year to EUR 7,746 thousand. In addition to compensation payments and insurance reimbursements, this item included reversals of write-downs amounting to EUR 2,377 thousand and prior-period income of EUR 3,650 thousand (previous year: EUR 1,104 thousand), attributable primarily to the reversal of provisions.
Conference, catering and miscellaneous income is recognised at a point in time. Invoices are generally payable within 14 days.