SPL profits take a serious nosedive
This compares with a profit of £23m (€28m) in the previous season, according to financial review of the SPL by PricewaterhouseCoopers (PwC).
Analysts said the league will have to adapt to survive as the figures showed net debt crept up by £11m to £99m with income falling by 15% from the previous season’s record high of £198m to £167m.
The review said this is due partly to clubs’ increased reliance on discretionary revenue streams such as sponsorship, marketing, merchandising and corporate hospitality which diminished due to the credit crunch.
It said there was a dramatic 56% drop in gains from player transfer sales from £29m to £13m and the 11% drop in attendance figures saw Aberdeen and Celtic impacted the most and only Falkirk and Hearts reporting improved gate numbers. Total stadium utilisation fell from 77% to 66%.
PwC partner and author of the report, David Glen said although some cost efficiencies have been made by many of the SPL’s chairmen and chief executives, there is an urgent need to recognise that existing levels of expenditure cannot be sustained.
“There is no doubt that the SPL has been adversely impacted by the recession, however, what I believe has had even greater bearing over the years is the rampant financial successes of clubs and leagues in both England and Europe.
“In a nutshell, the SPL cannot compete financially. It is simply unable to match the transfer fees or wage demands of the top talent needed to be competitive on an international platform and with it currently unable to generate a sufficient audience to attract the major media contracts enjoyed in other leagues, opportunities for investment are slipping away. The lack of, and uncertainty over, levels of income simply do not create a sound platform for investors or banks. Worryingly unless action is taken now, it could be an increasingly downward spiral for the SPL.”
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