Premiership wages drop for first time ever
Deloitte’s latest Annual Review of Football Finance, released today, reports that Premiership clubs’ total wages have dropped for the first time in the league’s history. The report also confirms that, the Premiership clubs remain by far the biggest earners in world football, with the top 20 clubs generating over €1.95 billion in revenue.
Dan Jones, Partner in the Sports Business Group at Deloitte, commented: "Over the past decade, we have seen Premiership wages rise by an average of 20% each year. The 3% reduction in the total wage costs for Premiership clubs, based on the latest available figures for the 2004/05 season, provides a stark contrast. Our latest analysis further supports the improving balance between revenue and costs, not just in England, but also across Europe. The need to ‘save clubs from themselves’ with a salary cap now seems far less important than it did five years ago.”
The report also highlights the prowess of the Premiership compared to its global rivals. Alan Switzer, Senior Consultant in the Sports Business Group commented: “While the German Bundesliga and Italian Serie A clubs had the biggest leaps in financial fortunes, with revenues up 17% and 16% respectively, English Premiership clubs remain well ahead. Premiership clubs benefit from a more even spread of revenue across different sources and different clubs, and greater profitability than European rivals. Let’s hope England’s World Cup on-pitch performance can mirror its business and financial success!”
Key findings of the Deloitte Annual Review of Football Finance 2006:
• The ‘big five’ European leagues generated 54% of the total €11.6 billion European football market. These are the top tier leagues in England (€1.97 billion), Italy (€1.34 billion), Germany (€1.24 billion), Spain (€1.03 billion) and France (€0.7 billion).
• Clubs in Germany (17%) and Italy (16%) had the highest rates of revenue growth for the 2004/05 season, compared to 1% in the English Premiership.
• In addition to the English Premiership, clubs in Italy (down 2%) and France (down 3%) also managed a reduction in total wages costs in 2004/05. Across the ‘big five’ leagues, the ratio of wages to revenue continues the improving trend of recent years.
• English clubs are the most profitable in Europe, followed by Germany. For 2004/05, a record 14 clubs reported pre-tax profits.
• Revenue generated by The Championship clubs of €453m reaffirms it as Europe’s sixth biggest league, after the ‘big five’, and an impressive €198m ahead of the next biggest second tier league in Europe (Italian Serie B).
Paul Rawnsley, Director in the Sports Business Group at Deloitte went on to discuss the outlook for football finance: “We expect English clubs to continue to lead the world financially. The new TV deals are set to boost Premiership clubs’ revenues to over €2.5 billion from 2007/08. Whilst the majority of the increase is likely to be spent on players, there will also be further investment across the clubs’ businesses to secure this broad based future success.”
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