Member Article

English football clubs' revenue tops £3 billion

Revenue across the top 92 clubs in English football reached nearly £3.2 billion in the 2012/13 season, an financial review has revealed.

Across the period the 92 clubs made £211 million worth of capital investments in stadia and facilities - the highest since 2006.

Premier League club revenue topped £2.5 billion for the first time following a 21% growth in commercial revenues, according to the Deloitte Annual Review of Football Finance. This was the highest of any league’s revenue in Europe.

13 of the Premier League’s clubs made an operating profit during the year, compared with ten the year before.

Over 75% of the Premier League clubs’ revenue increase in 2012/13 was spent on wages, which rose by £125 million (8%) to £1.8 billion and resulted in the overall Premier League clubs’ wages to revenue ratio reaching a record high of 71%.

Adam Bull, senior consultant in the Sports Business Group at Deloitte, added that wage costs are forecast to increase again in 2013/14: “The pattern in spending on wages following previous increases in broadcast deals, suggests it’s likely around 60% or more of the revenue increase in 2013/14 will flow through to wages.

“On that basis, we would expect Premier League total wage costs to reach a new record level of around £2.2 billion. However, given the forecast increase in revenue, this would also return the wages to revenue ratio below 70% for the first time since 2009/10.”

The season was bleaker for Championship clubs - where revenue reduction of £39 million was compounded by a £40 million increase in wage costs, leading to record operating losses of £241 million.

Pre-tax losses also increased by £170 million, equivalent to an additional £7 million per club, to £323 million.

Bull added: “The 2012/13 wages to revenue ratio for Championship clubs of 106% is the highest ever recorded by an English division and is clearly unsustainable without ongoing owner support.

“The introduction of the Championship Financial Fair Play Rules was widely seen, and advocated by the clubs who voted it in, as a necessary step to change clubs’ behaviour.

“The severity of the punishments applied to those who have not complied with the rules in the 2013/14 season and the eventual result of efforts to change the rules, will determine the extent to which they present an effective deterrent to widespread overspending.”

This was posted in Bdaily's Members' News section by Tom Keighley .