In 2011/12 the European football market grew to €19.4 billion

Premier League clubs’ revenue reached a record £2,360m in 2011/12, according to the 22nd Annual Review of Football Finance from the Sports Business Group at Deloitte. In total, the revenue of the top 92 clubs in English football exceeded £3 billion for the first time.

Dan Jones, Partner in the Sports Business Group at Deloitte, commented: “Despite operating in a challenging economic environment, English club football’s profile, exposure and increasingly global interest have continued to drive revenue growth for the top clubs. The combined revenue of the Premier League clubs increased by 4% to almost £2.4 billion, with another year of impressive commercial revenue growth, largely focussed among the highest ranked Premier League clubs, and relatively stable matchday and broadcast revenues.”

Adam Bull, Senior Consultant in the Sports Business Group at Deloitte, noted that further strong Premier League revenue growth is forecast: “Premier League clubs’ revenue is estimated to have grown by a further 5% to £2.5 billion in 2012/13. There will then be a significant increase of around £600m, almost 25%, in 2013/14, with the first season of the Premier League’s new broadcast deals, taking the projected revenue of Premier League clubs above £3 billion for the first time.”

Almost 75% of the Premier League clubs’ revenue increase in 2011/12 was spent on wages, which increased by £64m (4%) to £1.7 billion and resulted in the overall Premier League clubs’ wages to revenue ratio remaining at 70%.

Alan Switzer, Director in the Sports Business Group at Deloitte, noted: “The aggregate operating profit of Premier League clubs improved to £98m in 2011/12, though this is a margin equivalent to only 4% of revenue with half of the clubs making an operating loss. The Premier League clubs have agreed to a system of enhanced financial regulations, designed to improve the sustainability of its clubs. The successful implementation of these rules, coupled with the imminent boost to broadcast revenues, could provide huge benefits to the long-term development, growth and stability of the game and its clubs.”

Revenue in the Football League Championship increased by £53m (13%) to £476m in 2011/12. This was driven in part by the number of clubs being in receipt of parachute payments from the Premier League and the change in the mix of clubs.

Paul Rawnsley, Director in the Sports Business Group at Deloitte, commented: “Whilst Championship clubs’ revenues have held up well, their wages to revenue ratio has hovered threateningly at around 90% for the last four seasons, with operating losses once again reaching record levels in 2011/12. The Football League’s Financial Fair Play Rules look to be a necessary step to help change clubs’ behaviour in respect of spending on players. The application of sanctions in respect of the clubs’ results for the 2013/14 season should focus the minds of clubs who have been making heavy losses.”

Other key findings of the Deloitte Annual Review of Football Finance 2013 include:

• The total European football market grew to a record £15.7 billion (€19.4 billion) in 2011/12;
• Premier League clubs generated the highest revenue (£2.4 billion) of any league in Europe in 2011/12, followed by Germany (£1.5 billion), Spain (£1.4 billion), Italy (£1.3 billion), and France (£0.9 billion);
• The Bundesliga remained Europe’s most profitable league with operating profits of £154m, followed by the Premier League, with operating profits of £98m;
• The top 92 English clubs invested £188m in stadia and facilities in 2011/12, exceeding £150m annual spend for the fifteenth successive year. In the 20 seasons to 2011/12, English professional football clubs have made in excess of £3.3 billion in capital investments, with 29 club stadia built over this period;
• Average league capacity utilisation at Premier League clubs of 95% in 2012/13 was the highest level recorded in Premier League history and the 16th consecutive season above 90%;
• Net debt in respect of Premier League clubs was £2.4 billion, consistent with 2011;
• The Government’s tax take from the top 92 professional football clubs was around £1.3 billion in 2011/12.

Of the £2.4 billion net debt in the Premier League, 59% (£1.4 billion) is in the form of non-interest bearing ‘soft loans’ of which around 90% related to three clubs - Chelsea (£895m), Newcastle United (£267m) and Queens Park Rangers (£93m). On the positive side of the balance sheet, Premier League clubs recorded a carrying value of tangible fixed assets of almost £1.9 billion. This reflects the huge investment in facilities seen over the past two decades, and, in addition, a carrying value of player registrations of around £1.1 billion.