The publication of the annual review of football finance by Deloitte Sports Business is always a major event for those interested in the business side of football. The latest review shows that, against a very difficult economic background, Premiership clubs have boosted revenues, showing the continuing appeal of the competition.
The publication of the annual review of football finance by Deloitte Sports Business is always a major event for those interested in the business side of football. The latest review shows that, against a very difficult economic background, Premiership clubs have boosted revenues, showing the continuing appeal of the competition.
The downside is that clubs do not appear to be keeping their costs under control as they compete for Champions League places or even to avoid relegation. Operating profits are down and reducing outgoings will become a greater imperative as Uefa’s financial fair play regulations start to come into operation (although I retain doubts about how far they will want or be able to push them).
Premier League clubs’ revenues increased by 12 per cent in 2010/11, driven by broadcast revenue increasing by 13 per cent to £1.178m in the first year of a new three year broadcast cycle. However, more than 80 per cent of the Premier League clubs’ revenue increase was spent on wages which increased by £201m (14 per cent) to almost £1.6 billion. This resulted in a record and worrying Premier League wages/revenue ratio of 70 per cent.
Operating profits reduced by £16m (98 per cent) to £68m in 2010/11 and combined pre-tax losses were £380m. Gross transfer spending by Premier League clubs increased by £210m (38 per cent to a record level of £769m. The challenge for clubs remains transferring impressive revenue growth into sustainable profits.
More analysis will follow in subsequent posts.