Football clubs’ turnover up seven-fold in 10 years
The turnover of top division football clubs in England has increased seven-fold in the last ten years, according to the latest report from Deloitte & Touche.
The Annual Review of Football Finance estimates that the turnover of the Premiership exceeded £1.25 billion in 2002/03, whilst Football League’s clubs have seen their turnover rise to £467 million.
The number of clubs in the Premiership reporting an operating profit in 2002-03 was 83% and the number of Football League clubs reporting an operating profit has trebled compared to 2000-01.
Dan Jones, Director of Deloitte & Touche Sport, commented, ‘The past year has been a difficult one for football finances. Our report clearly shows grounds for optimism, but not complacency. The game has never had more money and England’s clubs lead the world in all areas of income generation and also in stadium investment. English football should be proud of that. What is needed now is strong management and leadership to control costs and improve the bottom line.’
The report highlighted that clubs still carry huge wage burdens for their players. Premier League clubs reported a wages / turnover ratio of 62% this year compared to 60% in 2000-01. The Football League brought its ratio down to 73% – the lowest level since 1996-97.
The consultancy firm argued that the future for a majority of players was one of short-term contracts linked to the division in which they are playing; an in-built adjustment of salary on promotion or relegation; more sophisticated performance-related pay; and signings for clubs as an unattached free agent or on one-season loan deals. It highlighted that the broadcasting revenue uncertainty across Europe, the spate of club Administrations in England and potential rule changes by the Football League would keep players’ wages in check.
Mr Jones stated, ‘We hope we have seen both a peak in player wages and the bottom of the trough in club losses. In reality, we expect wages to nudge up at the top level, but hope that wages/turnover ratios – a concern Deloitte has voiced since 1993 – will fall at all levels of English football. It has taken nine years and a spate of Administrations and financial pressures to force this issue to a resolution. We expect losses in the Football League to increase temporarily in 2002/03 but never again to exceed 2000/01 levels.’
The report highlighted that the top European clubs need to follow the English example by improving their revenue generations from stadia and commercial issues such as shirt sales.
Mr Jones added, ‘England’s matchday incomes are now almost three times those of other big leagues. The transformation of English stadia through spending of almost £1.5 billion in 11 seasons is fantastic. German, Italian and Spanish clubs need to address revenue generation and commercial issues at their stadia urgently or they will fall further behind.’
