Deloitte Review Reports Football Wage Hike
Deloitte has published its annual review of European football club finances with revenues and player wages again on the rise.
The report, which reviews club finances over the 2006/07 season, saw the revenues of top-flight English sides top £1.5bn for the first time.
However the ratio of footballers’ wages to turnover hit its highest level since the league began in 1992 with the pursuit of on-pitch success meaning clubs spent on players to the detriment of their finances, according to the report.
Only eight of the 20 Premier League clubs recorded an operating profit in 2006/7 – half the number which did so a year earlier.
Wages paid by top-flight English sides grew by 13% from the previous season to £969m. Unsurprisingly Chelsea had the highest wage bill, totalling £132.8m.
Spending was partly driven by the arrival of a new three-year broadcasting deal – worth £1.7bn – which began in August last year propelling Premier League revenues for the 2007/8 season to about £1.9bn, the report estimated.
‘A number of clubs essentially spent some of the money on new players and wages in advance,’ said one of the report’s authors, Deloitte’s Alan Switzer.
‘They knew the broadcast revenue was coming so it was acceptable to do so, but what would be more worrying would be if clubs’ wage bills increased even more significantly in coming years.’
The wages-to-turnover ratio hit 63%, up from 62% in 2005/6 and 48% in 1996/7, though Switzer said this was ‘still at a sustainable level’.
Elsewhere in Europe, the top flight of the French, Italian and Spanish leagues saw about the same proportion of turnover being spent on wages as in the Premier League. However in Germany, only 45% of income went on salaries.
The Bundesliga had the highest operating profit margin in Europe, the report said, at 18%, helped by Germany having Europe’s highest average attendances – with fans drawn by the continent’s lowest ticket prices.
Top Premier League Wage Bills – 2006/07
Chelsea – £132.8m (£114m)
Manchester Utd – £92.3m (£85.4m)
Arsenal – £89.7m (£82.9m)
Liverpool – £77.6m (£68.9m)
Newcastle Utd – £62.4m (£52.2m)
Source: Deloitte (2005/06 wages in brackets)
