Deloitte report: Gap between haves and have-nots widens

The influential Annual Review of Football Finance by Deloitte shows an ever profitable Premier League and a widening financial gap between it and Football League clubs.

The report shows that Premier League made just one fifth of its revenue from gate receipts with £5.3bn coming from broadcasting rights.

It has clearly been challenging for Football League clubs to grow or maintain revenue…

“Operating profits increased by £532m (649%) to £614m” but despite that huge profit, clubs still imposed ticket price rises on Premier League fans.

The profit for Premier League clubs is staggering. The report comments that “the lowest earning Premier League club (Cardiff City: £58m (2013/14)) earns more from central broadcast distributions, than all bar five European clubs – Real Madrid, FC Barcelona, Juventus, and the two Milan clubs – do from their corresponding domestic league deals” and that “we see no sign of the premium live sports media rights market cooling.”

The huge influx of cash into the Premier League could spell financial woes for Football League clubs. The report says that “it has clearly been challenging for Football League clubs to grow or maintain revenue” and that losses sustained by Championship clubs are a “significant issue.” The Championship, in particular, suffers most as clubs try to spend their way into the Premier League riches. The report says that “Championship clubs continue to deliver some alarming financial results.”

The report concludes that the introduction of Financial Fair Play Rules will help curb overspending adding that it “could be the most significant development in the football business since the Bosman ruling.”

The report’s stats

  • Six Premier League clubs had total wages above the average of £95m, and all finished in the top seven positions in the table.
  • Despite the increased revenue, the Premier League clubs’ aggregate net debt was £2.4 billion in 2014.
  • Championship clubs’ aggregate net debt increased by 12% to £1.1 billion at summer 2014. This is equivalent to more than twice the aggregate revenue of the clubs for 2013/14.
  • Almost half the clubs in the Championship had wage costs greater than revenue and only three clubs had a ratio below 70%.
  • League 1 wages increased by 14% to £124m, but the division’s wages to revenue ratio decreased by seven percentage points to 84%, the second consecutive season of the ratio decreasing.
  • League 2 wages decreased by 2% to £58m, but with revenues decreasing by 9% the wages to revenue ratio for the division rose by five percentage points to 74%.
Deloitte report: Gap between haves and have-nots widens
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