Premier League wage bill hits €1.4bn as clubs regain most profitable status

THE wage bill at the top English clubs soared by a record 23% to £1.2 billion (€1.4bn) in the 2007/08 season as they regained their status as the most profitable in the world.

Revenues at Premier League clubs are expected to total £2bn (€2.3bn) for the 2008/09 season, having soared to £1.9bn (€2.18bn) in the previous season, the annual review of football finance from the sport business group at Deloitte has found.

In a sign that the clubs will not be hit hard by the economic downturn, Deloitte expects England’s top clubs will continue to grow revenues in the coming season but at a slower pace.

Partner in the sports business group at Deloitte, Dan Jones said it will be hard to maintain revenue growth.

“The new economic realities may lead to flat matchday revenues. While attendances continue to hold up well, many clubs have frozen orreduced ticket prices. However, the stepped increases in the current domestic broadcast deal and the new UEFA Champions League TV deal make it likely overall revenues will edge up.”

Between 1992-2008, revenues for the clubs grew at an annual rate of 16%, compared to 5.4% for Britain’s economy as a whole.

Spending in summer 2008 and January 2009 transfer windows reached new record levels to an estimated €780m. Director in the sports business group, Alan Switzer said: “Despite this increase in wage costs, Premier League clubs improved their wages/revenue ratio to 62% and generated record operating profits in 2007/08 of €213m.

“However, lower revenue growth in forthcoming seasons means clubs will have to focus on improving cost control, both wages and other costs, if profits are to be maintained.”

The total European football market grew £1.1bn (€1.27bn) to £11.6bn (€13.4bn) in 2007/08.

Total revenues for the 72 Football League clubs exceeded £500m (€575m) for the first time. Enhanced TV revenues should help Championship clubs address record losses of £102m (€117m). The British government’s tax take from the top 92 clubs rose to £860m (€990m) and will exceed £1bn (€1.15bn) a year due to the 50% rate for earnings over £150,000 (€173,000).