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MUMBAI: The total European football market grew to a record
£15.3 billion in 2010/11 with the English Premier League
clubs generating highest revenue at £2.3 billion, according
to the 21st Annual Review of Football Finance from the Sports
Business Group at Deloitte.
Premier
League is followed by Germany and Spain (each £1.6 billion),
Italy (£1.4 billion), and France (£0.9 billion).
However,
Germany’s Bundesliga remained Europe’s most profitable
league with operating profits of £154 million, a 24
per cent increase on the previous year and widening the gap
to the Premier League, where operating profits decreased by
£16 million to £68 million.
In
total, the top 92 clubs in English football saw revenues increase
by nine per cent to £2.9 billion driven largely by broadcast
revenue increasing by 13 per cent, to £1.2 billion in
the first year of a new three-year broadcast cycle.
More
than 80 per cent of the Premier League clubs’ revenue
increase was spent on wages, which increased by £201
million to almost £1.6 billion, and resulted in a record
Premier League wages/revenue ratio of 70 per cent. The top
92 English clubs invested £167 million in stadia and
facilities.
Deloitte
Sports Business Group Partner Dan Jones commented, “The
uplift (in revenue) was primarily due to an increase in overseas
broadcast deal values, demonstrating once again the Premier
League’s unrivalled global popularity.”
The
study noted that the operating profits of the clubs reduced
by £16 million to £68 million and combined pre-tax
losses were £380 million despite increase in revenue
as gross transfer spending by Premier League clubs witnessed
a 38 per cent increase to reach record level of £769
million.
“The
challenge for clubs remains converting impressive revenue
growth into sustainable profits. This will become even more
important for a number of clubs as the financial results for
2011/12 will, for the first time, count towards their Uefa
Financial Fair Play break-even calculation,” noted Deloitte
Sports Business Group Consultant Adam Bull.
Of
the £2.4 billion net debt in the Premier League, 62
per cent is in the form of non-interest bearing ‘soft
loans’, of which almost 90 per cent relates to three
clubs - Chelsea (£819m), Newcastle United (£277m)
and Fulham (£200m).
On
the positive side of the balance sheet, Premier League clubs
recorded a carrying value of tangible fixed assets of almost
£1.9 billion, reflecting the huge investment in facilities
seen over the past two decades and a carrying value of player
registrations of around £1.2 billion.
Commenting
on the regulatory developments in the game, Deloitte Sports
Business Group Director Paul Rawnsley said, “The rulebooks
in England have evolved in recent years to enable a more interventionist
approach by the football authorities at all levels of the
professional game. In addition, clubs competing in Uefa competitions
from the 2013/14 season will be monitored for compliance with
the break-even requirement. This is the cornerstone of Uefa’s
financial fair play regulations which aim to help clubs across
Europe achieve a more sustainable balance between their costs
and revenues and encourages investment for the longer term
benefit of football.
"A
significant number of clubs around Europe have some distance
to travel on the road towards compliance. For many clubs there
is a renewed focus on increasing revenues and the cost-side
of the business model of some clubs also needs adapting. Overall,
we expect the effective implementation of these measures,
at both domestic and international levels, will help deliver
a better balance between clubs’ costs and revenues."
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