Premier League - Clubs post record losses
Premier League clubs' revenues rose above £2 billion for the first time in the 2009/10 season but wage increases and record pre-tax losses are worrying, the Deloitte Annual Report of Football Finance said.
Revenue at England's top 20 clubs was a record £2.030bn in 2009/10 and will have exceeded £2.2bn in 2010/11 in the first season under new broadcast deals.
However, 16 of the Premier League's 20 clubs made losses, totalling a record £484m, and the same number relied on funding from their wealthy owners.
The 20th annual edition of the influential report said Premier League football has shown "remarkable recession resistance" during the global economic crisis.
"At many football clubs, it's very hard to get season tickets," Alex Byars, Senior Consultant in the Sports Business Group at Deloitte, told Reuters.
"It's one of the last things fans are willing to give up (in a financial crisis). Football is a bit of a release and escape from the rest of the working week."
But all is not rosy in the Premier League even if it again outstripped other European top flights in terms of revenue while England's second tier Championship gets bigger average attendances than first divisions in Spain, Italy and France.
The rise in Premier League clubs' total wage costs (£64 million) exceeded the rise in revenue (£49m) for a second straight year, driving total wages above £1.4bn and resulting in a record wages/revenue ratio of 68 per cent.
"The record pre-tax losses of £445m in 2009/10 are also a concern, particularly as credit is likely to remain less available to football clubs than it was two or three years ago," Byars added.
"This may also, in part, explain why gross transfer spending by Premier League clubs decreased by more than 20 per cent from the record £713m in 2008/09 to £559m in 2009/10."
Although less than 10 per cent of the Premier League revenue increase fed into operating profits, which rose from £79m to £83m, the small rise was impressive compared to the Bundesliga where they fell 20 per cent to £113m.
However, Germany's top flight is still the most profitable league in the world ahead of the Premier League.
The report noted UEFA financial fair play rules are starting to come into force with clubs expected to break even before possible sanctions for non-compliance from the 2013/14 season.
Deloitte said Premier League clubs were well-placed for the new rules and had time to make the necessary adjustments.
Their net debt fell by 20 per cent, from £3.3bn in 2008/09 to £2.6bn in 2009/10, due to several factors including debt to equity conversions - notably at Manchester City - and property sales in Arsenal's case.