The salaries of the superstar players are set to continue their inexorable rise but there are already signs of an end to wage inflation for the rank and file below them, according to Manchester United executive vice-chairman Ed Woodward.
Woodward told the club’s investors that the effects of UEFA’s financial fair play rules, and new regulations brought in this season by the Premier League, were bringing pressure to bear on salaries.
United’s revenues rose by 29.1% to £98m for the first quarter of this financial year thanks to new sponsorship deals and the effect of the new Premier League TV rights deals, but staff costs rose by 31% to £52.9m, partly due to player wage increases.
Woodward envisages the very top players continuing to be able to demand higher and higher salaries.
He said: “In terms of player wages we are seeing inflation around it but we are also seeing, particularly within the Premier League, a fall in the acceleration around player wage growth.
“I think [this is] due to financial fair play rules and the rules that have been put in place in the Premier League.
“But when you look at the top end of wages, the top 10 teams in Europe or the top players, we are seeing inflation at that end. There is a bit of a mix going on and we will present a blend over that over the next three to five years.”
Woodward added that he was “excited” by BT Sport’s deal for Champions League TV rights which should see English clubs earn an extra £10m to £15m annually from 2015.
BT Sport outbid Sky and ITV to land the rights – it is paying nearly £900m for Champions League and Europa League matches, more than twice the current value.
That is also likely to lead to more intense competition for the Premier League TV rights from 2016, as Sky will be even more desperate to retain them.
Woodward said: “Sport is the ’must-have’ content, its value has grown dramatically.
“We are excited by the continuing rise in the value of sports content, evidenced, amongst other things, by the recently announced BT deal for the UK rights to broadcast the Champions League and Europa League matches for three seasons from 2015/16.
“This deal represents a meaningful increase over the current arrangement, which should translate into higher broadcasting revenues for the participating clubs.”
The Premier League deal has seen United’s broadcasting income rise by 40.9%, but even that has been outstripped by the club’s growth in commercial income of 62.6% with 12 new sponsorship deals including a global contract with Russian airline Aeroflot.
United’s overall debt remains much the same, at £361m, but the cost of servicing the debt has dropped considerably, by 21%, to £9.8m for the quarter primarily due to refinancing to achieve a much lower interest rate.
United are also predicting annual revenue will reach a record £420m by June, assuming “the team finishes third in the FA Premier League and reaches the quarter-finals of the Champions League and the domestic cups”.