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indiantelevision.com Team
MUMBAI: The total European football market grew to a record ?15.3 billion in 2010/11 with the English Premier League clubs generating highest revenue at ?2.3 billion, according to the 21st Annual Review of Football Finance from the Sports Business Group at Deloitte.
Premier League is followed by Germany and Spain (each ?1.6 billion), Italy (?1.4 billion), and France (?0.9 billion).
However, Germany?s Bundesliga remained Europe?s most profitable league with operating profits of ?154 million, a 24 per cent increase on the previous year and widening the gap to the Premier League, where operating profits decreased by ?16 million to ?68 million.
In total, the top 92 clubs in English football saw revenues increase by nine per cent to ?2.9 billion driven largely by broadcast revenue increasing by 13 per cent, to ?1.2 billion in the first year of a new three-year broadcast cycle.
More than 80 per cent of the Premier League clubs? revenue increase was spent on wages, which increased by ?201 million to almost ?1.6 billion, and resulted in a record Premier League wages/revenue ratio of 70 per cent. The top 92 English clubs invested ?167 million in stadia and facilities.
Deloitte Sports Business Group Partner Dan Jones commented, ?The uplift (in revenue) was primarily due to an increase in overseas broadcast deal values, demonstrating once again the Premier League?s unrivalled global popularity.?
The study noted that the operating profits of the clubs reduced by ?16 million to ?68 million and combined pre-tax losses were ?380 million despite increase in revenue as gross transfer spending by Premier League clubs witnessed a 38 per cent increase to reach 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,? noted Deloitte Sports Business Group Consultant Adam Bull.
Of the ?2.4 billion net debt in the Premier League, 62 per cent is in the form of non-interest bearing ?soft loans?, of which almost 90 per cent relates to three clubs - Chelsea (?819m), Newcastle United (?277m) and Fulham (?200m).
On the positive side of the balance sheet, Premier League clubs recorded a carrying value of tangible fixed assets of almost ?1.9 billion, reflecting the huge investment in facilities seen over the past two decades and a carrying value of player registrations of around ?1.2 billion.
Commenting on the regulatory developments in the game, Deloitte Sports Business Group Director Paul Rawnsley said, ?The rulebooks in England have evolved in recent years to enable a more interventionist approach by the football authorities at all levels of the professional game. In addition, clubs competing in Uefa competitions from the 2013/14 season will be monitored for compliance with the break-even requirement. This 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.
"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."
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