English Football, Buraimo et al. Journal of Sports Economics.2006; 7: 29-46
Football and finance ? 25 things to know
By Matt Ball
June 10 2005
As rumours grow today that Manchester United owner Malcolm Glazer is
planning to increase ticket prices by 54% over years it's time to take
a closer look at football and its finances. Consultancy Deloitte
Touche published this week its annual review of money and the
beautiful game. Here are the key things to know:
England rules the roost
1. The English Premiership generated more revenue than any of the
other league in Europe. In the 2003/04 season it earned £1.3 billion
which widens the gap between the Premiership and Italy?s Serie A, the
second highest earning league, by ?128 million to ?823 million.
2. Premiership clubs? revenue growth was driven by broadcasting and
matchday revenue. The last (stepped) year of the 2001/02 to 2003/04
BSkyB domestic TV deal contributed to increased broadcasting revenues
of £593 million ? up 9% from 2002/03. Broadcasting remains the largest
revenue source at 45% of total revenue.
3. Premiership matchday revenues grew impressively by 9% to £395
million (from £363 million in 2002/03) despite average league
attendances falling by 1% to 35,008. Thus increased ticket yields were
the key driver of higher revenues.
The richest clubs
4. Manchester United headed the Premiership revenue league table (and
Deloitte?s global Football Money League) at £172m, followed by Chelsea
(£144m and fourth globally) who had substantially narrowed the gap,
then Arsenal (£114m and sixth globally).
6. Premiership clubs reported overall operating profits of £149m ?
another record high (up £25m on the previous record) since the
formation of the Premier League and a healthy 11% margin. Only four
clubs made losses at the operating level.
7. In 2003/04, the average Premiership club generated revenue of £66m,
compared to £12m for a Championship club (a gap of £54m, compared to
£52m in 2002/03).
8. In 2003/04 England?s top 92 professional clubs generated total
revenue of £1.7 billion, up 7% from 2002/03.
9. The battle for the title of ?the richest game on earth? ? a contest
between the Football League Championship Play-off Final and the chase
for the UEFA Champions League fourth qualifying spot ? has narrowed;
but, at a minimum of £35m versus an average £19m respectively, the
Championship Play-off Final remains firmly on top.
10. Chelsea has a published total wages and salaries cost of £115m,
£38m higher than the second placed club, Manchester United, and almost
certainly the highest football club wages bill in the world.
11. Overall Premiership clubs? total wages grew by 7% in 2003/04, to
reach £811m compared to £761m in 2002/03. This was the lowest growth
rate since the formation of the Premier League in 1992 and well below
the astonishing compound annual growth rate of 23% seen in the
12. 2003/04 was a significant year for Championship clubs, as the
total spent on wages and salaries decreased by 9%, from £228m in
2002/03 to £208m in 2003/04. This is the first fall seen in that
division since the 1998/99 season.
13. The Championship has seen a large overall improvement in its
wages/turnover ratio from 89% to 72%. That is an average mark which is
still above the comfort level and leaves work to be done.
14. Deloitte calculate that the average Premiership player costs his
club (including NIC) around £0.9m a year (or £17,000 a week). Due to
tax differences it would cost a French club, for example, 44% more
?gross? to pay a player the same net wage. Relative to other big
European leagues, this is a significant structural advantage that
Premiership clubs enjoy.
15. 2003/04 gross transfer expenditure bounced up again to £414m,
after a substantial fall in 2002/03 (from £407m to £203m). The
resurgence is largely, but not entirely, due to the Chelsea phenomenon
with the club?s 2003/04 transfer spending of £175m.
16. The January 2005 transfer window saw an estimated gross transfer
spending by Premiership clubs of about £50m, which is similar to the
level seen in the January 2004 window. The bulk of annual spending is
in the summer transfer window.
17. The top 92 clubs? total player costs (including wages and net
transfers) exceeded £1 billion for the first time, despite the limited
increase in players? wages, and represented 59% of total turnover ? a
substantial increase from 2002/03, but still below 2000/01?s high of
18. Total spending by English clubs on stadia and facilities in
2003/04 was above £200m for the first time, taking total investment in
the post Taylor era to over £1.8 billion.
19. Spending by Premiership clubs on stadia and facilities was £178m
in 2003/04. This was the seventh successive season when their
investment exceeded £100m and brings total spending to over £1.3
billion since the start of the Premier League in 1992/93.
20. In the two years to summer 2004, Arsenal had invested £170m ?
primarily in relation to their new Emirates Stadium ? accounting for
over 50% of all Premiership spend in that period.
21. In 2003/04 Premiership average attendance remained above 35,000
and capacity utilisation stood at 94.7% ? the highest level since our
analysis began. In 2004/05, average attendance levels were around
33,900. The fall can be substantially attributed to the changing
composition of the Premiership as clubs coming up has smaller stadia
than those who went down. This resulted in c.10,000 fewer seats per
matchday being available.
22. However, clubs should not rest on their laurels as, in the 2004/05
season, we estimate that around 800,000 seats were unused at
Premiership matches. This represents lost income of around £24m to the
Premiership clubs as a whole.
23. In 2004/05 Football League attendances continued to grow and
reached 16.4m ? a 40 year high and proclaimed as the best attended
sporting competition in Europe. The Championship has seen attendances
growing strongly in recent years and a further 10% increase in 2004/05
means that the average Championship fixture attracted over 17,000
24. In the World Cup year of 2006, we can expect to see the highest
capacity and attendance levels ever seen in the Premiership; Football
League attendances at levels not seen since the 1960s; plus Cup Finals
and England matches being played in front of 90,000 crowds at the new
25. English professional football continues to pay substantial amounts
of tax to Government. In 2003/04, clubs in the top four divisions paid
a record c.£600m in various forms of tax. By the end of the 2004/05
season Deloitte Touche estimates that the clubs in the top four
divisions will have paid Government £4.3 billion in tax over the last
13 years. Premiership clubs account for £3 billion of this total.