Premier League revenues reached a record £2.27l billion in 2010/11, with the top 92 clubs witnessing an average revenue increase of 9%.
More than 80% of the Premier League clubs’ revenue increase was spent on wages, which increased by £201m to almost £1.6 billion, and resulted in a record Premier League wages/revenue ratio of 70%.
Dan Jones, Partner in the Sports Business Group at Deloitte, commented: “Top clubs in English football have continued to show impressive revenue growth despite a difficult economic climate.
“Premier League clubs’ revenues increased by 12% in 2010/11, driven by broadcast revenue increasing by 13%, to £1,178 million, in the first year of a new three year broadcast cycle.”
The uplift was attributed to an increase in overseas broadcast deal values, demonstrating once again the Premier League’s global popularity. Commercial revenue grew by 18% during 2011/11 although this was largely attributed to clubs with a bigger global profile.
Match day revenue increased by £20 million to £551 million, despite fact that almost half of all clubs witnessed a reduction in matchday revenues.
Adam Bull, Consultant in the Sports Business Group at Deloitte, noted: “Despite the increase in revenue generated by Premier League clubs, operating profits reduced by £16 million to £68 million in 2010/11 and combined pre-tax losses were £380 million.
“Gross transfer spending by Premier League clubs increased by £210 million (38%), to a 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.”
Revenue in the Football League Championship increased by £17 million to £423 million, prompted by an increase in the solidarity payments from the Premier League and the promotion of some larger clubs into the division.
Alan Switzer, Director in the Sports Business Group at Deloitte, commented: “The Football League’s achievement in attracting fans and growing revenues is often overlooked.
“The Championship is the fourth best attended League in Europe, ahead of the top divisions in Italy and France.
“Whilst Championship revenues have held up well, a wages/revenue ratio of 90%, combined operating losses of £130 million and record pre-tax losses of £189 million, are a cause for concern. It is therefore encouraging that in April 2012 Championship clubs agreed to the implementation of new financial fair play regulations that aim to help clubs reduce the level of annual losses.”
Clubs competing in UEFA competitions from the 2013/14 season will be monitored for compliance with the break-even requirement, which 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.
Commenting on the regulatory developments in the game, Paul Rawnsley, Director in the Sports Business Group at Deloitte, said: “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.”