Premier League club wages climb to new highs

 

Former footballer and manager Peter Reid says: "It's bad business practice"

The proportion of income that Premier League clubs spend on wages hit a new high in the 2010-11 season, says a Deloitte report into football finance.

Clubs in England's top football league paid some 70% of their income on salaries for the first time.

Manchester United, who won the league that year, spent 46% of revenue on pay, but Manchester City spent 114%.

The Deloitte report says that control of wages "continues to be football's greatest commercial challenge".

Its 21st Annual Review of Football Finance also says that pay discipline is needed "in order to deliver robust and sustainable businesses".

Cutting debts

Total wages across the Premier League rose by £201m (14%), equivalent to more than 80% of the £241m increase in club revenues that season, to give a final salary bill of £1.6bn.

Chelsea once again had the highest wage bill, at £191m.

TOP PREMIER LEAGUE WAGE BILLS 2010-11

  • Chelsea - £191m (up from £174m in 2009-10)
  • Manchester City - £174m (£133m)
  • Manchester United - £153m (£132m)
  • Liverpool - £135m (£121m)
  • Arsenal - £124m (£111m)

Source: Deloitte

The overall wages increase was driven by the clubs that finished in the top six positions in 2010-11, as well as Aston Villa. Between them they accounted for £145m of the total increase in pay.

However, clubs in the top league did manage to reduce average net debt by £351m, or 13%, to £2.4bn by the summer of 2011.

This was the lowest level since 2006, and largely due to significant debt reductions by Manchester United and Liverpool.

Revenue success

The Deloitte report also shows the huge growth in revenues since the Premier League was created two decades ago.

Premier League clubs' combined revenue reached a record £2.27bn in 2010-11.

In the same season, the 92 Premier and Football League clubs' combined revenues were £2.9bn, with average Premier League club revenues having risen to £114m.

Manchester City players celebrate a goal Manchester City paid out 114% of its income on wages

"There is little doubt that the league is a tremendous success in revenue terms," said Deloitte.

Average attendances were close to 35,000 in the Premier League in 2011-12, with more than 90% of seats sold.

However, the growth in revenues has been accompanied by rising costs, especially players' wages.

"The Premier League's key wages to revenue ration, which had stood at around 60% for most of the 2000s, has risen sharply in recent seasons to exceed 70% for the first time," said the report's author, Dan Jones.

"With broadcasting revenues likely to deliver limited growth in advance of the next Premier League deal commencing in 2013-14, the focus will be on the clubs themselves to grow revenue in areas directly under their control."

As a result of tougher economic conditions in the UK economy, Premier League clubs' match day revenues have now remained broadly constant for five seasons.

PREMIER LEAGUE FINANCES 2010-11

  • Revenues of 2.5bn euros, 769m euros ahead of second highest revenue earning league, the Bundesliga
  • Total operating profits of 75m euros, second behind the Bundesliga's 171m euros
  • Total revenues up by 12%
  • Matchday revenues up by 4%
  • Broadcasting revenue up by 13% and commercial revenues up by 18%
  • Majority of increase in commercial revenues down to Man Utd, Man City and Liverpool
  • Record loss of £82m at Man City
  • Man Utd generated operating profit greater than £100m for first time
  • Pre-tax losses of £380m, with only eight clubs recording a pre-tax profit

Source: Deloitte

Deloitte adds that "the overall environment remains challenging" despite some recent big commercial deals by Manchester City and Liverpool.

Outside of the top flight, Deloitte says that for many years the second tier of English football, the Championship, has struggled financially.

This is due to a combination of clubs adjusting to the impact of relegation from the Premier League, and others attempting to to achieve promotion, often taking financial gambles to try and get to the top flight.

It means that the Championship has delivered six seasons of increasing losses.

The Football League and Championship clubs have agreed to financial fair play rules, which seek to achieve a better balance between revenue and costs.

"We hope introduction of the regulations is the catalyst for a long awaited improvement in financial balance," said Deloitte.

Big five

From 2013-14 season Premier League clubs looking to participate in Uefa competitions will need to adhere to its financial fair play rules.

Deloitte says a combination of fair play rules and straitened economic times, which are limiting revenue growth, may see a majority of top flight clubs reporting operating losses rather than profits.

And it says that with funding sources becoming more constrained it may "finally bring about a change in behaviour".

Meanwhile, on the wider European picture, of the "big five" leagues - England, Germany, Italy, Spain and France - all but Ligue 1 in France saw growth.

Total collective revenues for the five leagues rose by 2% to 8.6bn euros.

Outside the big five, in Scotland the big two, Celtic and Rangers, accounted for 67% of Scottish Premier League clubs' total revenues.

 

More on This Story

From other news sites

* May require registration or subscription

The BBC is not responsible for the content of external Internet sites

Comments

This entry is now closed for comments

Jump to comments pagination
 
  • rate this
    +2

    Comment number 61.

    Don't get bogged down with the question of players wages, ask why the industry allows it to continue, who funds it, why do they fund it, where does the money come from,where does it go to. Why does football have such a high profile, who allows this to continue. Why is football so prominant on tv, has prominance in news broadcasts and the primary subject is not the game but money.

  • rate this
    -13

    Comment number 60.

    @ 23.Job13_2
    That seems to be a case of bite of your nose to spite your face.
    For the 90 minutes, they don't prance round the pitch showing their wallets are. They play football and most of the country like that, hence the popularity.
    If you stopped watching becuase of the salaries, then the only lose will be your own.
    Either that or you didn't actually care about the sport much to start with.

  • rate this
    -2

    Comment number 59.

    I agree that there needs to be a cap on wages at all of the clubs. The wages are on the verge of becoming ridiculous. Nobody wants a situation like the NFL in America, where the money overrides the sport. Fans should not have to keep up with these increases also, as tickets prices are also becoming unaffordable for many.

    http://playwithflair.com/2012/05/20/didier-drogba/

  • rate this
    +2

    Comment number 58.

    It's just insanity to pay somebody around 200k a week to play football, particularly in the current economic climate. What is needed is a Fifa cap on wages and transfer fees. If just the FA did it, English football would fall behind.

    It's not really about skill, it's about which foreign owner you get. What if Manchester City and Birmingham City had got each other's owner instead.......

  • rate this
    +1

    Comment number 57.

    Rangers nearly go bust for not paying their bills. Football Clubs from the Premiership to minor leagues not paying their tax bills. Winding up orders flying around.
    In what other industry would they increase staff wages?
    We really need to rebalance our ideals. No chance when the Con Dems offer the example of austerity for the masses while the Rich (inclusive of Premiership Players) pay less Tax

  • rate this
    +4

    Comment number 56.

    I love football, I've played the game (badly) and been a season ticket holder.

    I'm looking forward to the euros but I have none of the excited anticipation I've had for previous tournaments.
    I gave up on the champions league a long time ago as it is rigged in favour of the 'big clubs'
    Corruption is a worldwide endemic problem
    Situation at Rangers is a disgrace.
    Oh what have they done to my game.

  • rate this
    +7

    Comment number 55.

    The greed of football and footballers rolls on. How can a player be worth 50 times that of a top surgeon? Absurd. Hopefully the whole edifice will come crumbling down, and the mugs that pay upwards of £50 to watch a bunch of effeminate actors will continue paying the price.

  • rate this
    +70

    Comment number 54.

    Nothing would delight me more than to see football price itself out of business and the stadiums become wind blown derelicts. To help that happy day arrive you fans should just keep paying the overinflated prices for tickets, club shirts and other memorabilia that keeps the players (and their corporate masters) in the luxury that they so obviously deserve.

  • rate this
    +53

    Comment number 53.

    These days kids grow up wanting to be footballers, not for the game or pride of playing for your country (as used to be true), but as a fast track to wealth and celebrity. If professional football is to survive something needs to be done to curb the obscene levels of pay.

  • rate this
    +36

    Comment number 52.

    And yet the football clubs still expect Joe Public to pick up the bill for policing matches and the trouble that occurs between fans. If they can give players jaw dropping amounts they can pay for their own policing.

  • rate this
    +2

    Comment number 51.

    Crazy football club bosses and a total lack of governance by the 'governing' bodies.There was no 'football players strike' 15 years ago demanding 50k a week - clubs decided to throw cash at players salaries after Bosman and the FA did nothing about it.
    Fact is, as supporters we dont pay anywhere near all of their salary - Man City took 29million from gate receipts and spent 200mill on salaries.

  • rate this
    +4

    Comment number 50.

    All in favor of a national maximum wage? Millions for a few, Austerity for the rest of us, business as usual.

  • rate this
    +13

    Comment number 49.

    Only this week Italian PM proposed a closure of Italian football for 5 years due to match fixing. This industry, and I use the term deliberately is corrupt, funded by questionable sources to further the interests of hugh financial interests. This is no longer an innocent game, in fact the game is irrelevant, its about money. Ask yourselves where does all this money come from and where does it go.

  • rate this
    +6

    Comment number 48.

    For many of the supporters paying these wages it will take a lifetime to earn what the players are making in a month. How can it be justified?kicking a ball around for 90 minutes is at the end of the day no big deal.

  • rate this
    +12

    Comment number 47.

    Clubs should have a cap on pay. It's not that I mind what players earn, but because I feel the game is too unlevel, where only a few clubs will ever have any real chance of winning trophies. I support a bottom table team and now feel we will never win anything unless a billionaire takes over. From the top teams, the only one I admire is Arsenal because they try to do things the right way.

  • rate this
    +11

    Comment number 46.

    Simple solution make it a legal requirement that all sports provide free to air tv coverage. They will not starve. They do not deserve the pay they are given, no sportsmen do.

  • rate this
    +4

    Comment number 45.

    As a supporter of a 2nd division club we have hold raffles , lucky dips etc etc to stay afloat , the guys in the team play because they want to, not for the money.
    City spending 114% of revenue = negative equity , fair play ?
    I think not.

  • rate this
    +13

    Comment number 44.

    Supply and demand. It's not rocket science.

    It is also unsustainable. There will be consequences eventually and football, sadly, will suffer.

  • rate this
    +2

    Comment number 43.

    The problem is fans who work hard and scrimp and & save to watch their teams & see their cash leave there country.These footballers will pay minimal tax, the club owners are not british. A multibillion pound business where the UK tax payer does not benefit. Only people benefiting are lawyers and bankers during transactions..and you contribute to Murdoch if you want to watch the games live on sky

  • rate this
    +2

    Comment number 42.

    Capitalism is about the strong capitalizing on other people's weaknesses. A return to law of the jungle. How much longer can stories like this be tolerated by decent human beings?

 

Page 16 of 19

 

More Business stories

RSS

Features

BBC © 2014 The BBC is not responsible for the content of external sites. Read more.

This page is best viewed in an up-to-date web browser with style sheets (CSS) enabled. While you will be able to view the content of this page in your current browser, you will not be able to get the full visual experience. Please consider upgrading your browser software or enabling style sheets (CSS) if you are able to do so.