Football’s Finances

A great BBC article and videoclip for those following the finances of English football. The Premier League saw its revenues soar by 26% in the 2007/08 season to nearly £2bn with the revenues of Premier league English sides were £1.93bn. Despite the downturn, 11 of the 20 top league clubs made an operating profit in 2007/08, from eight a year before. Astonishingly, salary costs topped £1bn for the first time, and the clubs’ total net debt was £3.1bn.

The article is well worth reading, highlights include:

Two-thirds of the debt was carried by the big four of Manchester United, Liverpool, Chelsea and Arsenal.
The strong revenue growth outstripped the ever-upwards salary growth, which boomed by 23% to £1.2bn, the biggest annual increase in absolute terms recorded by the Premier League.
Premier League clubs increased commercial revenues to £447m, up by 12%, whereas matchday revenues grew more modestly, by 3%, to £554m. Meanwhile, revenues in the Championship increased by 2% to £226m in 2007/08, with total revenues of the total 72 Football League clubs exceeding £500m for the first time.

Dan Jones, the editor of Deloitte’s Annual Review of Football Finance said, “This summer will be critical for football clubs, it will be very interesting to see how the season ticket renewals go, how the corporate hospitality renewals go,” said Mr Jones.
“I think that is why we are seeing a lot of clubs freezing season ticket prices, reducing prices. They are very sensitive to the fans and their corporate sponsors and the problems they are facing.”

However, despite revenue growth, improved profitability has remained elusive.

“For many owners, Premier League clubs represent ‘trophy assets’ with the potential to deliver a long term return but which at best break even annually, rather then a cash cow delivering an ongoing ‘dividend’.”