Premier League clubs’ operating profits more than halve to £79m
by David Carter on 11 June 2010
The Deloitte Annual Review of Football Finance (June 2010) reveals that Premier League clubs’ revenue reached a record £1,981m in 2008/09 and will have exceeded £2 billion in the 2009/10 season, according to the latest Annual Review of Football Finance from the Sport Business Group at Deloitte. The new broadcast contracts will drive a further increase in revenues to £2.2 billion in 2010/11. In total, the Top 92 English clubs’ saw revenues increase by £100m to over £2.5 billion, driven by increased match day and broadcasting revenues and attendances.
But the bad news is that the Premier League clubs’ operating profits more than halved from £185m in 2007/08 to £79m in 2008/09. The £49m increase in Premier League clubs’ revenue was less than half the £132m increase in wage costs, driving total wages up to more than £1.3 billion resulting in a record wages / revenue ratio of 67%. Gross transfer spending by Premier League clubs also increased from £664m in 2007/08 to a record £713m in 2008/09.
The challenge for clubs continues to be revenue growth into profits that allow for continued investment in infrastructure and talent, particularly as credit is likely to remain less available to football clubs than it was two or three years ago.
Other key findings of the Deloitte Annual Review of Football Finance 2010 include:
- The total European football market grew to a record £13.4 billion in 2008/09
- Premier League clubs generated the highest revenue (£2.0 billion) of any league in Europe in 2008/09, followed by Germany, Spain and Italy (each £1.3 billion), and France (£0.9 billion)
- Net debt in respect of Premier League clubs increased to £3.3 billion in 2008/09, up from £3.2 billion the previous season
- The Premier League lost its status as the most profitable football league in the world for the second time in three years, again to the Bundesliga
- The top 92 English clubs invested £196m in facilities in 2008/09, the third highest annual figure since the formation of the Premier League and bringing the cumulative spending to over £2.7 billion since 1992/93.
Whilst debt in the Premier League has risen slightly to £3.3 billion, around 40% of this (£1.4 billion) is in the form of non-interest bearing ‘soft loans’. On the positive side of the balance sheet, Premier League clubs had £1.9 billion carrying value of tangible fixed assets, reflecting the huge investment in facilities seen over the past two decades, and the carrying value of player registrations which exceeded £1 billion for the first time.
The UEFA Club Licensing and Financial Fair Play Regulations, approved in May, will require clubs competing in UEFA competitions to aim to ‘break-even’, with potential sanctions from the 2013/14 season for non-compliance. The Premier League now requires that all its member clubs apply for a UEFA Club Licence, and has prevented clubs that exhibit financial warning signs from additional spending on players, to help limit future cost growth.
You can download the report foreword and highlights here.
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