Premier League Revenues Closing In On £2bn Mark
The revenue accrued by the 20 Premier League clubs jumped by 26% to close to £2bn in the 2007/08 season according to the latest Annual Review of Football Finance by accountants Deloitte.
The revenues of top-flight English sides for the season were £1.93bn, up from £1.5bn a year earlier. Despite the downturn, 11 of the 20 top league clubs made an operating profit in 2007/08, from eight a year before.
However Premier League salary costs topped £1bn for the first time, and the clubs’ total net debt was £3.1bn. Two-thirds of the debt was carried by the big four of Manchester United, Liverpool, Chelsea and Arsenal, but Dan Jones, the editor of Deloitte’s Annual Review of Football Finance, said those clubs all had business plans ‘that they feel make sense’.
The strong revenue growth outstripped the continuing rise in salary costs, which increased by 23% to £1.2bn, the biggest annual increase in absolute terms recorded by the Premier League.
The current three-year broadcasting deal – worth £1.7bn – began in August 2007 and proved the biggest boost to the clubs’ coffers.
Commented Jones: ‘In season 2007/08 the big change was the new broadcasting deal – most of the growth came from there. In the season that has just finished, 2008/09, we think the growth is going to be a little bit lower, but it is going to get clubs up to that magical £2bn mark – which is a remarkable achievement, an average of £100m a club in the Premier League.’
But he warned that the approaching summer months would reveal the extent to which fans and sponsors were willing to match their previous levels of demand, with clubs having to closely examine their marketing and pricing strategies.
‘This summer will be critical for football clubs, it will be very interesting to see how the season ticket renewals go, how the corporate hospitality renewals go.
‘I think that is why we are seeing a lot of clubs freezing season ticket prices, reducing prices. They are very sensitive to the fans and their corporate sponsors and the problems they are having.’
The wages to turnover ratio in the Premier League dropped slightly to 62%, a small decline, but still close to the previous year’s high of 63%.
Wages paid by top-flight English sides grew by 23% from the previous season to £1.2bn.
Premier League clubs increased commercial revenues to £447m, up by 12%, whereas matchday revenues grew more modestly, by 3%, to £554m.
Meanwhile, revenues in the Championship increased by 2% to £226m in 2007/08, with total revenues of the total 72 Football League clubs exceeding £500m for the first time.
Indeed, of the total net debt of £3.1bn in the Premier League, a total of £1.2bn was in non-interest bearing ‘soft loans’ from club owners.
Jones also pointed out that while footballer’s wages often attracted headlines, the amount of cash the industry put into national coffers was often ignored.
‘One thing that does not draw much attention in the midst of all these huge numbers around football is the tax side of things.
‘So, in 2007/08 season we think the overall tax payment to the government from professional football in England was about £860m. When the new top rate of tax comes in that will go up to £1bn.’
As well as looking at the English Premier League and Football League the Deloitte report also studies Germany, France, Italy and Spain.
Italy’s Serie A was the fastest growing league in terms of revenue, thanks mainly to the change in clubs in the league, including the return of Juventus, in 2007/08.
In joint second place after the Premier League, in terms of gross revenues, was Spain’s La Liga and Germany’s Bundesliga.
Premier League Clubs Debt – Top Five
Chelsea – £711m
Manchester Utd – £649m
Arsenal – £318m
Liverpool – £300m
Newcastle Utd – £245m
(Figures are net debt at end of 2007/08 season)
Premier League Wage Bills – Top Five
Chelsea – £172.1m (£132.9m)
Manchester Utd – £121.1m (£92.3m)
Arsenal – £101.3m (£89.7m)
Liverpool – £90.4m (£77.6m)
Newcastle Utd – £74.6m (£56.7m)
(2006/07 wages in brackets)
Source: Deloitte
