PREMIER LEAGUE clubs are making more money than ever – but they are splashing all the cash and MORE on wages and transfers.
England’s top flight is the most glamorous and most watched league in the world, as billions tune in to see stars such as Wayne Rooney and Robin van Persie.
But the sort of drama that climaxed with Man City clinching the title with a stoppage-time winner on the final day of the season comes at a hefty price.
According to Deloitte’s Annual Review Of Football Finance, the Premier League remains the richest in Europe.
Figures from the 2010/11 season reveal that total income rose 12 per cent to a record £2,271MILLION — almost £700million ahead of the nearest rival, the German Bundesliga.
Yet between them, the 19 clubs — Birmingham City did not publish accounts — made £16million LESS from day-to-day operations — and LOST an incredible £380MILLION before tax. That is because while total revenue from things such as TV rights, sponsorship and tickets climbed by £241million, spending on wages and transfers went up by a combined £411MILLION.
Only eight of the 19 clubs made a profit, despite the record income coming on the back of the biggest TV deal in the history of league football. Newcastle made the biggest profit — £33million — because of Andy Carroll’s £35million transfer to Liverpool.
Manchester City’s record losses of £197million made up more than half the Premier League deficit. A net transfer spree of £144million on stars including £27million striker Edin Dzeko and a wage bill of £173million contributed to the problem.
Chelsea, who pay the likes of John Terry well over £100,000 a week, topped the salary charts with £191million. The total spend on wages for all clubs was £1,599million. Adam Bull, consultant in the sports business group at Deloitte, said: “Despite the increase in revenue, operating profits reduced by £16million (19 per cent) to £68million in 2010/11 and combined pre-tax losses were £380million.
“Gross transfer spending by Premier League clubs increased by £210million (38 per cent) to a record level of £769million.
“The challenge remains converting impressive revenue growth into sustainable profits. This will become even more important as financial results for 2011/12 will, for the first time, count towards their UEFA Financial Fair Play break-even calculation.”
Under these FFP rules, clubs who do not break even over a three-season period — with a loss safety net of just £36million as the rules are phased in — face fines or even a ban from the lucrative Champions League.
The report also reveals the gap between the so-called big and smaller clubs has widened.
Combined commercial income went up in 2010/11 by nearly £83million but most of that was down to huge new sponsorship deals struck by Manchester United, Manchester City and Liverpool. Revenue from tickets went up £20million across the 19 clubs and the average attendance per game rose — but nearly half of the clubs made less money on the gate than the season before.
To combat the tough economic climate, some clubs lowered prices to keep crowds coming but that meant they ended up taking less money on their ticket sales.
A Premier League spokesman said: “Fans want to see their cash on the field, not in the boardroom. So while profits are down, crowds are up.”
Media rights cash went up 13 per cent, to £1,178million, with much of this down to improved deals with overseas broadcasters.
And the net debt of clubs fell — to £2,360MILLION. Of that, £1,500million is in “soft loans” — money lent to clubs by owners with no interest charged, including Roman Abramovich’s £819million investment in Chelsea.
The report also highlights the gulf between the Premier League and the rest of English football.
While the Premier League clubs raked in £2,271million, the 72 clubs in the Football League’s three divisions took in less than £700million between them.
So in terms of earning and splurging, the English top flight remains in a league of its own.
Wages
Chelsea .......... £191m
Man City ......... £173m
Man Utd .......... £153m
Liverpool ........ £135m
Arsenal ........... £124m
Transfers
Man City ......... £144m
Chelsea ............ £61m
Man Utd ............ £40m
Tottenham ........ £26m
A Villa ............... £18m
Pre-tax losses
Man City ......... £197m
Chelsea ............ £78m
A Villa ............... £54m
Liverpool .......... £49m
Bolton .............. £26m
Pre-tax profits
Newcastle ......... £33m
Blackpool ......... £20m
West Brom ....... £19m
Arsenal ............ £15m
Man Utd ........... £12m
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