Deloitte & Touche: English Premiership Income Hits £937m

The eleventh edition of the Deloitte & Touche Annual Review of Football Finance shows that English football’s income for 2000/01 grew by 18% to £1,269 million (2.1 billion Euros), while the aggregated income of all clubs in top European divisions reached £4 billion (6.6 billion Euros).

The ‘big five’ Leagues (England, Italy, Spain, Germany and France) generate 78% of European top division income. The English Premiership clubs are Europe’s financial champions with the largest individual share at 24% – almost a quarter of total income. In terms of growth from 1995/96 to 2000/01 England (22%) is just behind the top performer Spain (24%), and ahead of Italy (21%), Germany (19%) and France (18%).

Gerry Boon, Head of Deloitte & Touche Sport, the Sports Business Consultancy, observes ‘The English Premiership are the undoubted financial champions of Europe – generating the highest income and making the highest operating profits.’

Premiership operating profits jumped up 51% to £81 (134 Euros) million. The German Bundesliga 1 is the only other ‘big five’ top division consistently making operating profits – 87 million Euros in 2000/01.

Broadcasting is the largest element of overall ‘big five’ League income at £1.4 billion (2.4 billion Euros) or 46% out of a total £3.1 billion (5.2 billion Euros).

Matchday income totals £650 million (1.1 billion Euros) for the ‘big five’ Leagues, and England generates £292 (485 Euros) million, or 45%, of this – over double that in Italy, 3 times that in Spain and Germany and 4 times that of France.

Premiership attendances grew 7% in 2000/01 to an average 32,821 per game – c.3,000 higher than in Serie A, its nearest rival. Apart from England and France, all ‘big five’ League attendances declined.

‘England is the least reliant of the ‘big five’ on broadcast income (at 39% of total revenue) due to its clear competitive advantage when it comes to both matchday and commercial income’ says Boon.

‘The financial advantage enjoyed by English football has been fuelled by substantial investment in stadium facilities. Stadium expenditure in 2000/01 reached another record at £195 million (324 million Euros), bringing investment to over £1.25 billion (2.1 billion Euros) in ten years. Now that the Premier League has improved its TV deals considerably for 2001-2004, it should be an even clearer European leader in revenue in 2001/2002’.

He also points out that ‘the potential revenues from new media for premium content and the largely untapped global interest in English football mean the opportunities open to the English game’s commercial management and administrators remain appealing’.

Boon concludes that ‘many top European clubs look enviously at the finances of England’s top clubs’. The English top division also leads its European counterparts in profitability. Boon sees encouraging signs in that area across Europe.

He says ‘Cost control is a key issue – and has been for years. It is football’s biggest challenge – there is now a remarkable convergence of views across Europe and a real ‘window of opportunity’ to address the issues around football’s cost base. Europe’s top clubs appear ready to take the lead and set an example for the leagues, as a whole, to follow.’

English clubs’ revenues grew strongly across the board. The Premiership’s income was up £165 million (21%) to £937 million (1.6 billion Euros) and Football League revenues increased by 9% to £332 million (550 million Euros).

Boon praised English football’s growth, ‘Football is a fast-moving industry that in the past decade has faced significant challenges. In the face of those challenges, clubs and governing bodies have seized opportunities to be dynamic and to grow and develop their businesses. And it’s not just in the Premiership’ Boon added.

‘The English Football League Division One had, in 2000, a higher income than the top divisions of all ‘non-big five’ Leagues around Europe. It also carries the biggest club single game prize in the world – even if the winners are relegated from the Premiership the next season. Deloitte & Touche Sport calculate the May 2002 Division One Play-off Final was worth a minimum of £27 million to the winners.’

Cup attendances rose sharply in 2000/01, by 11% and 10% respectively for the FA and Worthington Cups, at both Premiership and Football League home grounds.

The Premiership clubs as a whole made an operating profit of £81 million (135 million Euros), up 51%, while pre-tax losses were reduced by 37%. Overall the Football League clubs made increased losses at both the operating and pre tax levels. Eighteen clubs reported operating profits (12 Premiership and 6 Football League) compared with fifteen a year earlier.

Premiership clubs’ total wages and salaries grew 17.6% to £562 million (0.9 billion Euros), representing the lowest growth recorded since 1995/96 and below the rate of income growth (21.4%) for the first time in five years. The overall Premiership wages/turnover ratio fell to 60%, reversing the rising trend of previous years.

Despite the uncertainty over reform of football’s player transfer system, spending by English clubs increased substantially to a new record level of £423 million (0.7 billion Euros) in 2000/01 of which £364 million (0.6 billion Euros) came from Premiership clubs,

‘Transfers of players from non-English clubs again outweighed transfers within English Leagues. The six-year split now shows £870 million (1.4 billion Euros) of transfer purchases from non-English clubs compared to £953 million (1.6 billion Euros) of transfers within England,’ said Boon. That’s £870 million (1.4 billion Euros) redistributed to clubs outside England.

Boon is positive about football’s future. ‘There are big challenges, and there always will be for something forever in the public eye’; but, he is sceptical of the more pessimistic scenarios that have been suggested regarding football’s finances.

‘Misleading comparisons have been made between football clubs and the fate of excessive dotcom companies. While both have seen rapid growth and huge media interest, it is obvious that football clubs are far more robust and resilient than many dotcoms ever were. Clubs have many millions of committed, enthusiastic paying customers; in most cases have been around for over one hundred years; and, have – when carefully applied – a real working business model.’

He concluded ‘Football is not just a few smart guys with a new idea and a pile of venture capital funding-this is a real business indelibly woven into the fabric of national life.’

For further information please contact:

Amy Thompson
T: 020 7303 3861
E: amthompson@deloitte.co.uk

Emma Thorogood
T: 020 7303 6264
E: emma.thorogood@deloitte.co.uk