Deloitte: Pl Teams Revenue Exceeds £2bn

Premier League clubs’ revenue reached a record £2.03bn in 2009/10 and will have exceeded £2.2bn in 2010/11 in the first season under new broadcast deals – according to the 20th Annual Review of Football Finance from the Sports Business Group at Deloitte. 

In total, the top 92 English clubs saw revenues increase by 5% to almost £2.7bn in 2009/10.? ?

Dan Jones, partner in the Sports Business Group at Deloitte, said: ‘Despite the difficult economic environment, Premier League clubs’ revenues increased by 2% in 2009/10. Broadcast revenue grew by 7% to £1,040m to become the first £1bn revenue stream of any domestic football league, even before further growth in 2010/11 from the uplift in overseas broadcast deal values’.

‘Like for like average Premier League attendances were broadly level in 2010/11. Top flight football has shown remarkable recession resistance’.? ?

However, for a second successive year the increase in Premier League clubs’ total wage costs of £64m (5%) exceeded the rise in revenue (£49m), driving total wages up to over £1.4bn and resulting in a record wages/revenue ratio of 68%. ?

Alex Byars, senior consultant in the Sports Business Group at Deloitte, added: ‘Of the £49m increase in Premier League clubs’ revenues, less than 10% (£4m) fed through to operating profits, which increased from £79m to £83m’.

‘The challenge for clubs continues to be converting impressive revenue growth into sustainable profits that allow for investment in both infrastructure and talent.  The record pre-tax losses of £445m in 2009/10 are a concern, particularly as credit is likely to remain less available to football clubs than it was two or three years ago’.
?
Revenue in the Football League Championship exceeded £400m for the first time in 2009/10 (up 9%), largely due to the change in mix in clubs and, in particular, the presence of Newcastle United. ? ?

Alan Switzer, director in the Sports Business Group at Deloitte, commented: ‘The Football League’s achievement in attracting fans and growing revenues is often overlooked. The Championship is the third best attended League in Europe, ahead of the top divisions in Spain, Italy and France’.? ?

‘Whilst revenues have held up well, a wages/revenue ratio of 88% is a cause for concern and will need to be addressed by Championship clubs, particularly given that Football League clubs have been put on notice about the need to rein in their spending due to the forthcoming 25% reduction in the value of live TV rights, effective from 2012/13’.

The Deloitte Annual Review of Football Finance 2010 also found that the Premier League remained the second most profitable football league in the world, whilst operating profits increased slightly in the Premier League (up £4m to £83m), they fell by 20% to £113m in the Bundesliga.
 
The Government’s tax take from the top 92 professional football clubs will also have exceeded £1bn in 2010/11 due to the increase in VAT (to 20%) and the introduction of the 50% rate for earnings over £150,000.