LONDON: English football’s financial might was demonstrated anew on Thursday as business analysts Deloitte revealed that England’s 92 professional clubs generated record £4 billion ($5.8 billion, 5.2 billion euros) revenues in 2014-15.
Fired by the all-powerful Premier League, which saw revenues climb three percent to £3.3 billion, England’s professional clubs breached the £4 billion threshold for the first time.
Premier League clubs generated £1.5 billion more than their nearest rivals in Germany’s Bundesliga and with a new £5.14 billion television rights deal due to kick in this year, their dominance is set to continue.
“The pace of football’s financial growth in two and a half decades is staggering,” said Dan Jones from Deloitte’s Sports Business Group.
“By half-time of the second televised Premier League game next year [season], more broadcast revenue will have been generated than during the whole of the First Division season 25 years ago.
“For the first time, the Premier League leads the football world in all three key revenue categories — commercial, match-day and broadcast — and this is driving sustainable profitability.
“When the enhanced new broadcast deals commence in the 2016-17 season, operating profits could rise as high as £1 billion.”
Deloitte’s 25th Annual Review of Football Finance revealed that Premier League clubs recorded a second consecutive year of pre-tax profits in the 2014-15 financial year (£121 million), which last happened in 1999.
While the revenue increase was a modest three percent, operating profitability (£546 million) was the second highest it has ever been.
Combined gross expenditure on new players reached a record high of £1.1 billion and wage costs rose seven percent to exceed £2 billion for the first time.
Losses in Italy, France
Accordingly, the league’s wage/revenue ratio rose from 58 percent to 61 percent, but Jones said: “This represents the second lowest level since 2004-05 and is 10 percentage points lower than in 2012-13.
“In fact, in the last two years, only 30 percent of revenue increases have been consumed by wage growth, whereas in the five years to 2012-13 this figure was 99 percent.”
Reflecting the clamour to get into the lucrative Premier League, wage costs in the second-tier Championship rose four percent to £541 million.
Despite a reduction in the wages/revenue ratio from 106 percent in 2013-14 to 99 percent, Deloitte said the level of spending by Championship clubs remained “unsustainable” without owner funding.
The value of promotion to the Premier League for next season —secured by Burnley, Middlesbrough and play-off winners Hull City—has been estimated at £170 million per club.
More widely, the combined revenue for the five major European leagues—England, Germany, Spain, Italy and France —reached a new record of 12 billion euros, a rise of six percent.
The Bundesliga (316 million euros) and Spain’s La Liga (264 million euros)—home of this season’s Champions League winners Real Madrid and runners-up Atletico Madrid, as well as Europa League champions Sevilla —also generated profits.
But clubs in Italy’s Serie A (-133 million euros) and France’s Ligue 1 (-35 million euros) generated combined operating losses. France was the only nation of the so-called ‘big five’ not to record revenue growth.
Deloitte said that the financial performances of each of the five leagues was “heavily influenced by a small collection of globally pre-eminent clubs.”