Premier League clubs’ revenues increase 4%, to £2.4 billion, in 2011/12, following 15% growth in commercial revenue
6 June 2013
Premier League clubs’ revenue reached a record £2,360m in 2011/12, according to the 22nd Annual Review of Football Finance from the Sports Business Group at Deloitte. In total, the revenue of the top 92 clubs in English football exceeded £3 billion for the first time.
Dan Jones, Partner in the Sports Business Group at Deloitte, commented: “Despite operating in a challenging economic environment, English club football’s profile, exposure and increasingly global interest have continued to drive revenue growth for the top clubs. The combined revenue of the Premier League clubs increased by 4% to almost £2.4 billion, with another year of impressive commercial revenue growth, largely focussed among the highest ranked Premier League clubs, and relatively stable matchday and broadcast revenues.”
Adam Bull, Senior Consultant in the Sports Business Group at Deloitte, noted that further strong Premier League revenue growth is forecast: “Premier League clubs’ revenue is estimated to have grown by a further 5% to £2.5 billion in 2012/13. There will then be a significant increase of around £600m, almost 25%, in 2013/14, with the first season of the Premier League’s new broadcast deals, taking the projected revenue of Premier League clubs above £3 billion for the first time.”
Almost 75% of the Premier League clubs’ revenue increase in 2011/12 was spent on wages, which increased by £64m (4%) to £1.7 billion and resulted in the overall Premier League clubs’ wages to revenue ratio remaining at 70%.
Alan Switzer, Director in the Sports Business Group at Deloitte, noted: “The aggregate operating profit of Premier League clubs improved to £98m in 2011/12, though this is a margin equivalent to only 4% of revenue with half of the clubs making an operating loss. The Premier League clubs have agreed to a system of enhanced financial regulations, designed to improve the sustainability of its clubs. The successful implementation of these rules, coupled with the imminent boost to broadcast revenues, could provide huge benefits to the long-term development, growth and stability of the game and its clubs.”
Revenue in the Football League Championship increased by £53m (13%) to £476m in 2011/12. This was driven in part by the number of clubs being in receipt of parachute payments from the Premier League and the change in the mix of clubs.
Paul Rawnsley, Director in the Sports Business Group at Deloitte, commented: “Whilst Championship clubs’ revenues have held up well, their wages to revenue ratio has hovered threateningly at around 90% for the last four seasons, with operating losses once again reaching record levels in 2011/12. The Football League’s Financial Fair Play Rules look to be a necessary step to help change clubs’ behaviour in respect of spending on players. The application of sanctions in respect of the clubs’ results for the 2013/14 season should focus the minds of clubs who have been making heavy losses.”
Other key findings of the Deloitte Annual Review of Football Finance 2013 include:
Of the £2.4 billion net debt in the Premier League, 59% (£1.4 billion) is in the form of non-interest bearing ‘soft loans’ of which around 90% related to three clubs - Chelsea (£895m), Newcastle United (£267m) and Queens Park Rangers (£93m). On the positive side of the balance sheet, Premier League clubs recorded a carrying value of tangible fixed assets of almost £1.9 billion. This reflects the huge investment in facilities seen over the past two decades, and, in addition, a carrying value of player registrations of around £1.1 billion.
Notes to editors:
The exchange rate at 30 June 2012 has been used to convert figures between Euros and Pounds Sterling (£1 = €1.236).
About the Sports Business Group at Deloitte
Over the last 20 years Deloitte has developed a unique focus on the business of sport. Our specialist Sports Business Group offers a multi-disciplined expert service with dedicated people and skills capable of adding significant value to the business of sport. Whether it is benchmarking or strategic business reviews, operational turnarounds, revenue enhancement strategies or stadium/venue development plans, business planning, market and demand analysis, acquisitions, due diligence, expert witness, audits or tax planning; we have worked with more clubs, leagues, governing bodies, stadia developers, event organisers, commercial partners, financiers and investors than any other adviser.
For further information on our services you can access our website at www.deloitte.co.uk/sportsbusinessgroup.
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