Post by QPR Report on Jun 8, 2010 6:53:53 GMT
Edit: This came out a year ago, so presumably the new one will be out in the next day or very shortly after
The Guardian/David Hytner
Premier League spending not sustainable, warns Deloitte• Bundesliga profits outstrip Premier League
• Wage-to-revenue ratio a cause for concern
The Premier League has been overtaken by the Bundesliga as the world's most profitable league, as experts from Deloitte's Sports Business Group warned that England's top division could not "continue indefinitely" unless it curbs its current rate of spending.
Deloitte's latest annual report lays bare the Premier League's excesses. Wages, transfer spending and debt levels were up for the year 2008‑09 but concern focused on how wages had exceeded the clubs' collective revenues to account for a record ratio of 67%. Deloitte forecasts that the percentage would rise again in 2009‑10 and advised clubs to use the income from the new and more lucrative broadcast deal, which kicks in next season, to bring the levels down.
"The record wages to revenue ratio of 67% in the Premier League in 2008-09 is a concern, and we expect wages growth to outstrip revenue increases again in 2009‑10," said Alan Switzer of Deloitte. "This will further reduce operating profitability, a decline that cannot continue indefinitely. However, clubs have the opportunity, via the revenue uplift from the new broadcast deals from 2010‑11, to get wage levels down to a more sustainable share of revenue. It's not the first such opportunity. It remains to be seen whether they grasp it."
Total wage costs were up £132m to £1.3bn; gross transfer spending rose from £664m in 2007‑08 to a record £713m and debt increased from £3.2bn to £3.3bn, although 40% of this was in non‑interest‑bearing "soft loans".
The Premier League can continue to lay claim to being the world's richest as its clubs generated total revenues of £2bn, more than Germany, Spain and Italy (each £1.3bn) and France (£0.9bn). But Premier League operating profits fell from £185m to £79m, and have been overtaken by the Bundesliga, for the second time in three years, as the most profitable in football. Cost control, according to Deloitte, remained the key challenge for Premier League clubs.
"The challenge for clubs continues to be converting their impressive year on year revenue growth into sustainable levels of profits that allow for continued investment in infrastructure and talent," said Dan Jones of Deloitte. "This is particularly the case as credit is likely to remain less available to football clubs than it was two or three years ago."
English football's ability, in general, to defy the credit crunch was another feature of the financial year. Premier League clubs' revenues increased to £1.98bn and Deloitte forecasts that, driven by the new broadcast contract, they would rise to £2.2bn by the end of 2010‑11. The revenue of the 92 clubs in England's top four divisions increased by £100m to more than £2.5bn in 2008‑09.
The Championship is the third best attended league in Europe, although a wages‑revenue ratio of 90% in the division was "a cause for serious concern and will need to be addressed".
"Despite the sharp economic contraction, Premier League clubs were able to increase revenues by 3% in 2008-09," said Jones. "While commercial income fell marginally (1%), both matchday and broadcasting revenues increased. For the 2009‑10 season just ended, combined attendances for the Premier League and Football League exceeded 30m – a level not seen since well before the introduction of all-seated stadiums.
"When you factor in the recently negotiated Premier League overseas broadcast deals, which come into effect from 2010‑11, football has shown remarkable recession resistance during these difficult economic times."
www.guardian.co.uk/football/2010/jun/08/premier-league-warned-spending-deloitte
The Times June 8, 2010
Bundesliga profits a lesson to English clubs Gary Jacob
The World Cup finals do not begin until Friday, but England have already lost their first battle to Germany. The Bundesliga has become the world’s most profitable football league, leapfrogging the Barclays Premier League, in which there is increasing concern about levels of player wages and debt.
The Government can also claim victory because it is set to receive more than £1 billion in tax from professional clubs in this country with the introduction of the 50 per cent tax rate that effectively hits the pockets of players in the npower Championship and above.
German clubs made £146.1 million of profit in 2008-09, roughly double the £79 million that was made by Premier League clubs.
Bundesliga clubs increased their income by 10 per cent, but, crucially, they did not go out and splash the cash on wages. The Premier League clubs, in contrast, earned an additional £49 million but spent an extra £132 million more on player wages. The upshot is that the proportion of players’ wages to turnover has risen to a record 67 per cent in this country — up by 7 per cent in only four years — compared with 51 per cent in Germany.
Dan Jones, of Deloitte, the company of accountants that produced the report, said that Premier League clubs can look to Germany for a good working model of how to run a successful club that stays in profit.
“It is very worrying, as the proportion looked to have stabilised around the late 50s,” Jones said. “Essentially the clubs, excusing the old top four and promoted teams, are spending far more to chase either European football or simply staying up. Germany have been doing things right, albeit that the wage demands are different as they don’t have the same strength in depth of clubs and players as here. A few years ago all of their 18 clubs made a profit, but that is down to 11.”
Jones predicts that the collective operating profit could fall to levels of the early 1990s in 2009-10. However, the Premier League clubs could address the situation, because they will collectively earn about £200 million more in television income from next season. The picture in the Championship is worse, with the wages-torevenue ratio rising to 90 per cent.
www.timesonline.co.uk/tol/sport/football/european_football/article7145759.ece
The Guardian/David Hytner
Premier League spending not sustainable, warns Deloitte• Bundesliga profits outstrip Premier League
• Wage-to-revenue ratio a cause for concern
The Premier League has been overtaken by the Bundesliga as the world's most profitable league, as experts from Deloitte's Sports Business Group warned that England's top division could not "continue indefinitely" unless it curbs its current rate of spending.
Deloitte's latest annual report lays bare the Premier League's excesses. Wages, transfer spending and debt levels were up for the year 2008‑09 but concern focused on how wages had exceeded the clubs' collective revenues to account for a record ratio of 67%. Deloitte forecasts that the percentage would rise again in 2009‑10 and advised clubs to use the income from the new and more lucrative broadcast deal, which kicks in next season, to bring the levels down.
"The record wages to revenue ratio of 67% in the Premier League in 2008-09 is a concern, and we expect wages growth to outstrip revenue increases again in 2009‑10," said Alan Switzer of Deloitte. "This will further reduce operating profitability, a decline that cannot continue indefinitely. However, clubs have the opportunity, via the revenue uplift from the new broadcast deals from 2010‑11, to get wage levels down to a more sustainable share of revenue. It's not the first such opportunity. It remains to be seen whether they grasp it."
Total wage costs were up £132m to £1.3bn; gross transfer spending rose from £664m in 2007‑08 to a record £713m and debt increased from £3.2bn to £3.3bn, although 40% of this was in non‑interest‑bearing "soft loans".
The Premier League can continue to lay claim to being the world's richest as its clubs generated total revenues of £2bn, more than Germany, Spain and Italy (each £1.3bn) and France (£0.9bn). But Premier League operating profits fell from £185m to £79m, and have been overtaken by the Bundesliga, for the second time in three years, as the most profitable in football. Cost control, according to Deloitte, remained the key challenge for Premier League clubs.
"The challenge for clubs continues to be converting their impressive year on year revenue growth into sustainable levels of profits that allow for continued investment in infrastructure and talent," said Dan Jones of Deloitte. "This is particularly the case as credit is likely to remain less available to football clubs than it was two or three years ago."
English football's ability, in general, to defy the credit crunch was another feature of the financial year. Premier League clubs' revenues increased to £1.98bn and Deloitte forecasts that, driven by the new broadcast contract, they would rise to £2.2bn by the end of 2010‑11. The revenue of the 92 clubs in England's top four divisions increased by £100m to more than £2.5bn in 2008‑09.
The Championship is the third best attended league in Europe, although a wages‑revenue ratio of 90% in the division was "a cause for serious concern and will need to be addressed".
"Despite the sharp economic contraction, Premier League clubs were able to increase revenues by 3% in 2008-09," said Jones. "While commercial income fell marginally (1%), both matchday and broadcasting revenues increased. For the 2009‑10 season just ended, combined attendances for the Premier League and Football League exceeded 30m – a level not seen since well before the introduction of all-seated stadiums.
"When you factor in the recently negotiated Premier League overseas broadcast deals, which come into effect from 2010‑11, football has shown remarkable recession resistance during these difficult economic times."
www.guardian.co.uk/football/2010/jun/08/premier-league-warned-spending-deloitte
The Times June 8, 2010
Bundesliga profits a lesson to English clubs Gary Jacob
The World Cup finals do not begin until Friday, but England have already lost their first battle to Germany. The Bundesliga has become the world’s most profitable football league, leapfrogging the Barclays Premier League, in which there is increasing concern about levels of player wages and debt.
The Government can also claim victory because it is set to receive more than £1 billion in tax from professional clubs in this country with the introduction of the 50 per cent tax rate that effectively hits the pockets of players in the npower Championship and above.
German clubs made £146.1 million of profit in 2008-09, roughly double the £79 million that was made by Premier League clubs.
Bundesliga clubs increased their income by 10 per cent, but, crucially, they did not go out and splash the cash on wages. The Premier League clubs, in contrast, earned an additional £49 million but spent an extra £132 million more on player wages. The upshot is that the proportion of players’ wages to turnover has risen to a record 67 per cent in this country — up by 7 per cent in only four years — compared with 51 per cent in Germany.
Dan Jones, of Deloitte, the company of accountants that produced the report, said that Premier League clubs can look to Germany for a good working model of how to run a successful club that stays in profit.
“It is very worrying, as the proportion looked to have stabilised around the late 50s,” Jones said. “Essentially the clubs, excusing the old top four and promoted teams, are spending far more to chase either European football or simply staying up. Germany have been doing things right, albeit that the wage demands are different as they don’t have the same strength in depth of clubs and players as here. A few years ago all of their 18 clubs made a profit, but that is down to 11.”
Jones predicts that the collective operating profit could fall to levels of the early 1990s in 2009-10. However, the Premier League clubs could address the situation, because they will collectively earn about £200 million more in television income from next season. The picture in the Championship is worse, with the wages-torevenue ratio rising to 90 per cent.
www.timesonline.co.uk/tol/sport/football/european_football/article7145759.ece
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