Bayern Munich - Elevation

Bayern Munich won the double of the Bundesliga and the German Cup in 2015/16, obviously a fine feat, but not that surprising for Germany’s most successful club. In total, the Bavarians have won the league no fewer than 26 times and the cup on 18 occasions, though Karl-Heinz Rummenigge said that it was still a “historic achievement” to top the Bundesliga four years in a row.

The Bayern chairman was impressed: “If I were to assign grades for the 2015/16 season, I’d give the coach and the team an A. Even in our greatest eras we were lucky to win the championship three times on the bounce at the most.” He added, “The days of FC Hollywood are over – and that’s good. We make headlines on the pitch now.”

The story was almost as good in Europe. Rummenigge again, this time on the Champions League: “We’ve advanced to the last four for the fifth time in a row. That too is unprecedented in terms of continuity at FC Bayern.” Indeed, in that period Bayern have reached the final twice and won the trophy in 2012/13 by beating Borussia Dortmund at Wembley.

However, the traditional giants are showing some signs of vulnerability this season after Pep Guardiola departed for a new challenge with Manchester City in the Premier League to be replaced by experienced Italian manager, Carlo Ancelotti. Guardiola won seven trophies in his three years in Germany, including two doubles, but Ancelotti’s team has not had things all their own way this season.

They currently sit behind newly promoted RB Leipzig in the Bundesliga and have failed to top their Champions League group following an embarrassing 3-2 defeat at Russian minnows FC Rostov. As Rummenigge admitted, “A new era is about to begin. Everyone has chased us over the last few years. Now we’re doing the chasing!”

"Radio, Radio"

Off the pitch, Bayern’s dominance remains unchallenged, as they have just announced record profits and revenue for the 2015/16 season. Profit before tax shot up by €23 million (72%) from €31 million to €54 million, though profit after tax “only” rose by €9 million (39%) from €24 million to €33 million, due to a higher €21 million tax charge.

Revenue increased by a massive €118 million (25%) from €474 million to €592 million, just shy of the €600 million threshold. All revenue streams grew, though commercial income led the way, increasing by €65 million (23%) from €278 million to €343 million, driven by sponsorship, up €56 million (49%) to €170 million, and merchandising, up €6 million (6%) to €108 million.

Broadcasting income actually rose more in percentage terms (39%) or by €42 million from €106 million to €148 million with the growth split fairly evenly between the Bundesliga (€21 million) and the Champions League (€16 million). Match day income was up €12 million (13%) to go above €100 million for the first time (€102 million).

However, much of the revenue growth was eaten up by a rise in expenses. Wages increased by €33 million (15%) from €227 million to €260 million, while other expenses rose €39 million (25%) from €185 million to €224 million and player amortisation was up €9 million (15%) to €70 million.

Player sales also fell €15 million from €50 million to €35 million. Incidentally, I am using the Deloitte definition of revenue here in order to facilitate comparisons with other European clubs, so have excluded this €35 million of transfer income. Adding this to my revenue of €592 million gives the €627 million announced in Bayern’s press release.

As another technical aside, note that these are the consolidated group accounts for FC Bayern München AG, which include the Allianz Arena München Stadion GmbH and other subsidiaries.

Whichever way you look at it, deputy chairman Jan-Christian Dreesen was justifiably proud of these results: “The 2015/16 fiscal year has been fantastic for FC Bayern, in terms of both sports and finances.”

Of course, making money is nothing new to Bayern Munich, as this is the 24th year in a row that they have been profitable. Traditionally, the club invests almost all of its profits into the squad or stadium development, but their profits have been steadily rising recently, averaging €37 million over the last three years (before tax).

Rummenigge boasted, “This combination is what makes FCB unique. We have the greatest success in our sporting endeavours, and we pay for it all by ourselves.”

That’s very impressive, though it should be noted that it is far from unusual for German clubs to make profits. In fact, 11 out of 18 Bundesliga clubs were in the black in 2014/15 (with 13 of 18 profitable in the preceding season).

Indeed, many of Bayern’s rivals across Europe have also posted large profits in recent times, e.g. in 2015/16 Manchester United reported a pre-tax profit of €59 million (at a Euro exchange rate of 1.20), Real Madrid €43 million and Barcelona €36 million. Moreover, these are not necessarily “flash in the pan” performances, as Real Madrid and Arsenal have been profitable since 2002, while Barcelona have reported profits the last five years.

One factor behind Bayern’s growing profits is that they now make more money from player sales, averaging €42 million in the last three seasons, compared to just a €13 million average in the previous seven seasons.

The 2015/16 player sales of €35 million included the sale of Xherdan Shaqiri to Inter €15 million, Sebastian Rode to Dortmund €12 million, Bastian Schweinsteiger to Manchester United €9 million and Dante to Wolfsburg €4.5 million. The previous season was even better at €50 million, thanks to selling Toni Kroos to Real Madrid €30 million and Mario Mandzukic to Atletico Madrid €22 million.

Next year’s accounts should also include a reasonable contribution from player sales following Mario Götze’s €22 million return to Dortmund plus Pierre-Emile Hojberg’s move to Southampton €15 million.

Bayern highlighted the growth in EBITDA (Earnings Before Interest, Taxation, Depreciation and Amortisation), which rose by €31 million (28%) from €111 million to €143 million. This has more than doubled from the recent low of €69 million in 2011.

It should be noted that Bayern’s definition includes transfer income, but the growth was even better using the more generally accepted definition of recurring income, i.e. excluding lumpy profits from player sales. This metric improved by €46 million (75%) from €62 million to €108 million.

That’s very good, but to place it into perspective, Manchester United announced 2015/16 EBITDA of €230 million, i.e. more than twice as much, so it’s not surprising that they could pay so much money for Schweinsteiger and still leave him in the stands.

Despite a blip in 2014/15, due to the lack of competing in the UEFA Super Cup and FIFA Club World Cup, Bayern’s revenue growth has been mighty impressive, as the €302 million increase since 2009 means that the revenue has more than doubled in the last seven years.

Over 60% (€183 million) of that growth has come from commercial operations, largely sponsorship (€97 million) and merchandising (€71 million), but the two other principal revenue streams have also shot up: broadcasting by €78 million (112%) and match day by €41 million (68%).

In Germany Bayern’s revenue places them in a league of their own. Not only is the gap large, but it is getting larger. Since 2009, their closest challenger, Borussia Dortmund, managed to grow their revenue by an impressive €179 million, but this was still €123 million less than Bayern’s growth in this period.

The situation is even worse for the other German clubs. Since 2009 Schalke have only grown revenue by €95 million, while Stuttgart’s revenue was flat and Hamburg’s actually fell. This has resulted in Germany only having three clubs in the Money League top 20, compared to five clubs in 2009. This has inevitably led to concerns that Bayern’s financial supremacy will be bad for competition in Germany.

It’s a different story in Europe with Bayern battling to keep pace with the other elite clubs. Indeed in 2014/15 Bayern actually slipped two places in the Money League to fifth, their lowest position since the 2006/07 season. However, it should be noted that Bayern are one of only three clubs to be ever present in Deloitte’s annual rankings.

Bayern found themselves around €100 million behind Real Madrid and Barcelona, so the significant 2015/16 revenue growth was required to keep up with the Spanish giants, not to mention repelling the threat of the newer clubs like Paris Saint-Germain and Manchester City, who sandwiched Bayern in last year’s table.

For 2015/16, on a like-for-like basis, Bayern’s growth to €592 million has made inroads into the top clubs’ advantage. Real Madrid still lead the way with €620 million, though this is only €28 million ahead of Bayern, closely followed by Manchester United €618 million and Barcelona €612 million.

We should make clear the importance of exchange rates here, as I have used €1.20 to the £, while it is entirely possible that Deloitte might use an average 2015/16 rate of around €1.30 when they publish the next edition of the Money League, which would obviously have a favourable impact on Manchester United’s Euro figures.

Returning to the 2014/15 Money League, if we compare Bayern’s revenue with the other clubs in the top ten, we can see that they enjoy a substantial commercial advantage over almost all clubs, but they are lagging behind in broadcasting income.

As we have seen, this already rose significantly in 2015/16, while there is further scope for improvement in this revenue stream from the new Bundesliga TV deal starting in 2017/18, which should be worth at least an additional €30 million to Bayern.

From a domestic perspective, Bayern’s gap to the second club (Borussia Dortmund) was €193 million in 2014/15, which was only surpassed in France, where PSG were €371 million ahead of Marseille. However, the gap is much smaller in Italy, England and Spain.

Moreover, the gap to the 3rd placed club in Germany (Schalke) was  €254 million, which is a huge competitive advantage. This is much more than the gaps in England and Italy, though the difference is even higher in Spain and France.

Following Bayern’s impressive 2015/16 revenue growth, the gap to Dortmund has now widened to an astonishing €307 million: €592 million vs. €285 million. In other words, Bayern now earn more than twice as much as their closest domestic competitor.

As we have seen, the largest revenue category at Bayern is commercial income, which accounts for more than broadcasting and match day combined. That said, commercial’s share of 58% has dropped from the 60% peak two years ago, thanks to the growth in broadcasting taking that category’s share up to 25%. As a consequence, match day has diminished in importance to just 17%, even though it does bring in more than €100 million.

Only one other club in the Money League top 20 had commercial income contributing more than Bayern, namely Paris Saint-Germain with 62%, thanks to the French club’s “innovative” deal with the Qatar Tourism Authority, which is apparently worth €200 million.

Indeed PSG was the only club with higher commercial revenue than Bayern with €297 million, though Bayern were ahead of clubs like Manchester United €264 million, Real Madrid €247 million and Barcelona €244 million.

And that was before Bayern’s 2015/16 growth in commercial revenue from €278 million to €343 million, comprising sponsoring and marketing €170 million, merchandising €108 million, Allianz Arena €39 million and other commercial activities €26 million. Bayern do have the advantage of being the most supported team in the largest commercial market in Europe, but that’s still some going.

Although commercial deals are very important to all German clubs, Bayern still earn significantly more than the others. In fact, the commercial gap to Dortmund, which had narrowed in 2014/15, rose to €191 million last season, the highest ever difference between the two.

Bayern’s returning president Uli Hoeness said that Dortmund would need to have a more consistent track record of winning trophies if they hoped to match Bayern’s global appeal, but that is a tough ask, given their revenue shortfall.

Bayern have been boosted by strategic partnerships with three major German companies (Adidas, Allianz and Audi), who all have an 8.33% stake in the club with the other 75% owned by the fans.

Adidas has a long-standing relationship with Bayern, extending their kit deal in 2015 until 2030, even though it had a further five years to run. This was for a reported €900 million, which is worth €60 million a season, up from the previous €25 million. Allianz have also extended their stadium naming rights deal for a further five years to 2041 at around €6 million a season, while Audi is a main sponsor and automotive partner.

That’s great news, but it is still far below Manchester United’s €90 million deal with Adidas (and, for that matter, the new kit deals at Real Madrid and Barcelona, which are worth  €120-150 million according to various press reports). On the other hand, it is considerably higher than Dortmund’s latest kit deal with Puma, which is worth only €15 million.

In addition, Deutsche Telekom have extended their long-running shirt sponsorship deal, first established in 2002, to 2023, reportedly increasing the annual fee to €30 million (though some reports have this as high as €35 million).

Although the highest in Germany, It’s a fair way behind other leading European clubs, e.g. Manchester United’s Chevrolet deal is worth around €70 million, while Barcelona have just signed an agreement with Rakuten for €55 million.

As well as Bayern’s four main partners, the club also has a raft of other big name partners, split between 9 platinum, 5 gold and 11 official, including DHL, Gigaset, Goodyear, Hypovereinsbank, Lufthansa, SAP, Paulaner Coca-Cola and Giorgio Armani.

"Mats Entertainment"

The Allianz Arena is another major money-spinner for Bayern. They initially shared ownership with TSV 1860 Munich, but have fully owned the venue since 2006, leasing it back to their former partners since then. As well as annual stadium naming rights of €6 million, Bayern benefits from all other activities staged at the Arena, including concerts and German national team matches.

Perhaps the most staggering figure is from merchandising sales, which has nearly tripled since 2009  to €108 million. This means that nearly a fifth of Bayern’s revenue is generated by shirt sales and the like. In fact, according to consultants PR Marketing, Bayern have averaged sales of 1.2 million replica shirts in the last five years, a figure only surpassed by Manchester United, Real Madrid and Barcelona.

Internationalisation is a key element of Bayern’s plans, both in America and Asia. They have opened a new office in New York, while a tour to China in the summer of 2015 was preceded the launch of an official online store and a content sharing agreement with Chinese state broadcaster CCTV.

Where Bayern (and other German clubs) have lost out is in broadcasting revenue. Their total of €106 million in 2014/15 was not too bad, but it was only around half of the  €200 million earned by Real Madrid and Barcelona, who benefited greatly from their individual domestic deals. It was even behind the likes of  Manchester United, Tottenham Hotspur and Everton, even though none of those clubs managed to qualify for the Champions League.

More encouragingly, Bayern grew their broadcasting income by 39% (€42 million) to €148 million in 2015/16 with increases coming from both the Bundesliga (€21 million) and the Champions League (€16 million).

The increase in Bundesliga distribution to €72 million was largely due to Bayern’s successful performances in international club competitions over the previous five seasons and the resulting improvement in their UEFA coefficient ranking, as well as the increase in income from international TV rights.

TV revenue in Germany is divided among clubs via a points system, which ranks clubs proportionate to their league positions over the past five seasons. Performance is weighted in favour of the more recent years, so last season a factor of 5 was applied to 2014/15, 4 to 2013/14, 3 to 2012/13, 2 to 2011/12 and 1 to 2010/11.

However, a form of equality is then applied, as the club with most points from this algorithm only receives twice as much money as the club that has the lowest number of points. In this way, Bayern received €40 million in 2015/16, while bottom club Darmstadt received €20 million.

Nevertheless, television income is not very high in Germany, as can be seen from the 2014/15 Money League, where Bayern were only 12th, Borussia Dortmund 18th and Schalke 20th. Rummenigge said, “It’s a dramatic disadvantage. The DFL has to make sure the German top clubs remain competitive among the elite teams in Europe.”

To place the Bundesliga TV deal into context, Aston Villa, who finished last in the Premier League in 2015/16, received around €80 million TV money, which was higher than the €72 million Bayern received for winning their league.

It is therefore good news that the Bundesliga recently announced a new domestic TV rights deal with Sky and Eurosport for the four years from 2017/18 to 2020/21, which will significantly increase the money by 85% from €2.5 billion to €4.6 billion, working out to €1.160 billion a season. As the league advised that total rights would be worth €1.4 billion, that implies that the international rights will also rise to €240 million a season.

According to projections, Bayern’s share of the TV revenue should rise to around €100 million a season (though the distribution model will also change), but this is still a lot less than the money earned in England. The new Premier League deal is likely to deliver €150-200 million to the top four English clubs, depending on the Euro exchange rate.

The new Bundesliga total of €1.4 billion will take it ahead of Serie A (€1.2 billion) and Ligue 1 (€0.8 billion), but they will still lag behind La Liga (€1.5 billion) and obviously be miles below the Premier League (€3.4 billion).

It is also worth noting that these TV rights cover the two top German leagues with 80% of the domestic deal going to Bundesliga 1 and 20% to Bundesliga 2.

However, the Bundesliga’s chief executive, Christian Seifert, noted, “We are now number two behind the Premier League (in terms of domestic rights).” Although he described the TV market as challenging, Seifert did emphasise the growth prospects: “Germany is the biggest single market in Europe, but pay TV still does not have the market position of other countries. There is a lot of potential though.”

Some believe that the relatively low amount paid for international rights can be ascribed to Bayern’s dominance, which has made the league boring, but Seifert argued that overseas interest was not purely in the title winners: “Last year we saw very competitive games to decide who will play in the Champions League, who will play in the Europa League or relegation.”

The news is much better for Bayern in Europe, where they received €64 million for reaching the semi-finals in the Champions League. That said, it was still less than four clubs who did not progress as far as Bayern, i.e. Juventus, Paris Saint-Germain, Chelsea and Roma, thanks to the more beneficial TV pools in Italy, France and England.

A club’s share of the market pool is based on the value of the national TV deal and the number of clubs from that country who reach the group stages. Thus, Bayern are adversely impacted by Germany’s €68 million TV pool being less than half England’s €143 million, while Italian and French clubs benefited from only two clubs reaching the group stage.

Half then depends on the progress in the current season’s Champions League, while half depends on the position that the club finished in the previous season’s domestic league (1st place 40%, 2nd place 30%, 3rd place 20% and 4th place 10%).

As a result, Bayern only received €26 million from the TV pool in 2015/16, even though they reached the Champions League semi-final, compared to Juventus €53 million, Roma €48 million, Manchester City €46 million, Chelsea €45 million and PSG €40 million.

Little wonder that Bayern are strong supporters of UEFA’s  proposed change in the TV pool distribution system, so that each country will retain much less from its national TV deal than the current arrangement (reportedly down from around 50% to 15%) with the vast majority going into the central plot in future. With a completely straight face, Rummenigge observed, “I am pleased that we have managed to reach quick and simple decisions for the good of football.”

Despite the disadvantages of the TV pool, the Champions League has still been a lucrative revenue stream for Bayern in recent times, earning them €256 million in the last five season, around €100 million more than Dortmund in the same period.

The other German clubs were even further behind: Bayer Leverkusen received €117 million, Schalke €101 million, Wolfsburg €61 million and Borussia Mönchengladbach €39 million.

Bayern’s match day income rose 13% (€12 million) from €90 million to €102 million in 2015/16, partly due to the capacity at the Allianz Arena being raised to 75,000 in the second half of the 2014/15 season.

Their average attendance was only below Dortmund’s incredible 81,178 in Germany, though a fair way ahead of Schalke 61,386. In Europe, Bayern were only surpassed by Barcelona 78,250 and Manchester United 75,300, but ahead of Real Madrid 67,700.

Despite Germany’s reputation for low ticket prices, Bayern’s match day revenue of €90 million was actually the sixth largest in the world in 2014/15, even before last season’s increase, though the likes of Arsenal, Real Madrid, Barcelona and Manchester United all generate €115-130 million.

In fairness, the Bundesliga only has 18 clubs, so Bayern play two fewer home matches a season compared to the other major leagues. Their average revenue per match of €3.6 million is substantially more than any other German teams (Dortmund €2.5 million, Schalke €1.9 million), but is still a fair way below the money earned by Manchester United (€5.4 million) and Arsenal (€4.9 million).

Bayern’s wage bill rose 15% (€33 million) from €227 million to €260 million in 2015/16, but the wages to turnover ratio still fell to a very impressive 44%, the lowest for many years, following the significant revenue growth, and way below the 50% targeted by the Bundesliga.

Again, it is interesting to contrast the wage bill with Dortmund, whose €140 million is around half as much as Bayern’s, despite a 19% increase in 2015/16. In fact, the €120 million gap between Bayern and Dortmund is as high as it has ever been. In fairness to the Bavarians, their revenue is also substantially higher, but that does not make it any easier for Dortmund (or anyone else) to compete.

Using the same exchange rate as Deloitte’s Money League, Bayern had the 8th highest wage bill in world football in 2014/15, along with one of the lowest wages to turnover ratios (only beaten by Dortmund in the top 15 clubs).

However, that gap should be much smaller now, as the wage bills at the English clubs will be impacted by the weakness of Sterling. It should also be noted that the Spanish giants’ figures are inflated by sports, such as basketball and handball.

The other staff cost, player amortisation, rose 15% (€9 million) from €61 million to €70 million. This has sharply grown from €33 million in 2011, reflecting Bayern’s increasing activity in the transfer market.

However, this is still not particularly high for a leading club. As a comparison, player amortisation at big spending Manchester United and Real Madrid is over €100 million. That said, it is considerably higher than the €32 million booked by Dortmund.

To explain this concept, transfer fees are not fully expensed in the year a player is purchased, but the cost is written-off evenly over the length of the player’s contract. As an example, Mats Hummels was reportedly bought from Dortmund for €35 million on a five-year deal, so the annual amortisation in the accounts for him will be £7 million.

Traditionally, Bayern Munich have been the big spenders in the German transfer market, often acquiring the strongest players from rivals, e.g. Mario Götze, Robert Lewandowski and Hummels from Dortmund; Manuel Neuer from Schalke.

However, Rummenigge was keen to emphasise the club’s two pillar system: “We sign crucial players like Robert Lewandowski and Arjen Robben, but we also aspire to nurture our own talents.”

That may be the case, but Bayern’s outlay on players has been on the rise: averaging €31 million 2005-09; €53 million 2009-13; and up to €68 million 2013-16. Recruitment has been good with the club bringing in the likes of Arturo Vidal (Juventus), Douglas Costa (Shakhtar Donetsk), Joshua Kimmich (Stuttgart), Mehdi Benatia (Roma), Juan Bernat (Valencia) and Xabi Alonso (Real Madrid).

However, the net spend has actually fallen in the last four seasons: from €44 million to €24 million, as Bayern have earned good money from the sales of Kroos, Mandzukic, Götze, Luiz Gustavo, Mario Gomez, Hojberg, Shaqiri and Rode.

Despite these sales, Bayern’s net spend of €95 million over the last four years is still miles higher than almost all other German teams – with one important exception, as new boys RB Leipzig have actually spent most in the Bundesliga with a cool €100 million in this period.

To show how far ahead these two clubs are, the next highest spending clubs (on a net basis) have shelled out less than half: Hamburg €43 million and Dortmund €42 million. In fact, over the last four years no fewer than eight Bundesliga clubs had net sales, as opposed to spend. Moreover, all other Bundesliga clubs combined only spent a net €78 million – less than either Bayern or Leipzig.

Although the football club has had no debt for a while, the group did have debt from the Allianz Arena company, which was used to finance the stadium, though this was paid off 16 years ahead of schedule. As Rummenigge explained, “In 2005 we borrowed exactly 346 million euros in a 25-year plan, which was meant to last until 2030. Now we have paid the stadium off after only nine years. I'm very proud of that.”

This meant that bank debt was completely eliminated in 2014, having been as high as €167 million in 2009. At the same time cash balances have been over €100 million for the last few years.

We will not know whether this is still the case in 2015/16 until the detailed accounts are published, but we can see that current assets (including cash) have risen by 29% (€51 million) to €227 million, so the chances are that cash has increased. On the other hand, total liabilities (including debt) have also grown 67% (€68 million) to €171 million.

The (early) clearing of the debt is undoubtedly a splendid achievement, as recognised by former Bayern great Paul Breitner, “Bayern are self-sufficient. We are independent and we are the only major club in the world that does not have any debts and is in a secure financial situation.”

Again, we will have to wait for Bayern’s detailed accounts to see a cash flow statement, but the club’s power can be seen from previous reports. In the ten years up to 2015 Bayern generated €540 million of cash from operating activities. However, they were also boosted by €200 million from new share capital.

Unfortunately, Bayern do not analyse their €475 million net investment in assets between players and infrastructure, but it is likely that the vast majority of this expenditure has been for improving the squad.

What is notable is that more than a quarter of a billion Euros was used to repay loans. Another €35 million was used to pay dividends, an increasing trend. In fact, the next dividend payment has been increased to €12 million, up from €7.5 million.

Now that the stadium debt has been repaid, it has given Bayern even more cash to spend on transfers. It is not entirely clear exactly how much more, but Uli Hoeness once claimed that they would have an additional €25 million budget each year once the debt had been cleared.

Hoeness is once again Bayern president, having been elected unopposed at the recent AGM. He had resigned in February 2014 after being found guilty of tax avoidance via an undeclared Swiss bank account, though he was released after serving half of his prison sentence due  to good behaviour.

"Street Fighting Man"

Bayern make great play of their independence with Breitner saying, “We do not need any sheikhs or oil tycoons.” Deputy chairman Dreesen sang from the same sheet: “We pay everything through our own efforts. The main thing is we’re one of the very, very few clubs at the top of Europe that are completely independent.”

That said, there is little doubt that the club’s strategic shareholders have been instrumental in the club’s success, developing a virtuous circle, whereby each Bayern trophy means more sales for the sponsor (especially Adidas), which in turn means more money for Bayern. Not to mention the funding made available by direct investment, such as Audi paying €110 million for an 8.33% stake in 2014.

Perhaps the biggest threat to Bayern’s position in Germany is the way clubs have started to get round the  “50+1” rule, which dictates that members must own a minimum of 50% of the shares plus a deciding vote, theoretically preventing a club from being subject to the whims of an individual owner and taking on excessive debt.

"Look Sharp!"

However, RB Leipzig, owned by Austrian energy drink manufacturer Red Bull, have implemented a scheme whereby a member must pay €800 a year (compared to Bayern’s €60) and they reserve the right to reject any application without justification. This means that Leipzig only have 17 members (and most of them are Red Bull employees) compared to 284,000 at Bayern.

This may not break the letter of the rule, but it is clearly against the spirit, though what other option does an “upstart” club have if it wants to mount a genuine challenge to Bayern’s financial dominance?

Though not entirely convincing, Hoeness seemed to welcome the emergence of RB Leipzig, “The more I think about it, it is good to have really good rivals. Good for us and the competition.”

"Calling Captain Autumn"

Captain Philippe Lahm followed a similar line after Bayern’s recent defeat to Dortmund, though his remarks were heavily laced with sarcasm: “It’s wonderful for the league, exactly what everybody had wished for.”

This was a reference to people becoming fed up with the predictability of Bayern winning the Bundesliga. Indeed, before he knew he was joining, Ancelotti had observed, “Bayern win the league with their hands in their pockets.”

A large part of that success has been due to their financial strength, as acknowledged by Dreesen: “FC Bayern is in outstanding shape, operating at the highest Champions League level in financial terms. Our club is in a superb position. That’s been the case for the last few years, and that's more than ever true for 2016. Our entrepreneurial objective is the maximisation of sporting success alongside financial prudence.”

He added, “Our increasing financial power will be used primarily to make the regular investments required in our first-team squad in order to ensure we remain competitive among the elite teams in Europe.”

Bayern’s appetite for more Champions League success is obvious, as Rummenigge admitted, “We long for it.” Whether they have enough firepower to win again in Europe is another question. Their excellent 2015/16 financial results will certainly do their prospects no harm, but it will still be difficult for Ancelotti to add to his three (managerial) victories in Europe’s flagship tournament.