Experts predict England's top flight to surpass a combined revenue of £3 billion in 2013/14, while the overall wages-to-revenue ratio increased to a record 71 per cent
The revenue generated by teams in England’s top flight far exceeds that of any division in Europe including Germany (£1.7bn), Spain (£1.6bn) and Italy (£1.4bn), although the Bundesliga remains Europe’s most-profitable league with operating profits of £226m.
The Premier League follows that with operating profits of £82m, while 13 teams recorded an operating profit in 2012/13, an increase from 10 in the previous year.
Due to new broadcast deals and enhanced commercial growth, Deloitte estimate that Premier League clubs’ revenue will increase by almost 30% to £3.2 billion in 2013/14.
Premier League sides continue to spend a high portion of their revenue on wages, which rose by 8 per cent to £1.8 bn, meaning that the overall wages-to-revenue ratio increased to a record 71%.
“The pattern in spending on wages following previous increases in broadcast deals, suggests it’s likely around 60% or more of the revenue increase in 2013/14 will flow through to wages,” said Adam Bull, senior consultant in the Sports Business Group at Deloitte.
“On that basis, we would expect Premier League total wage costs to reach a new record level of around £2.2 billion. However, given the forecast increase in revenue, this would also return the wages to revenue ratio below 70% for the first time since 2009/10.”
Finances for Championship sides were poor as a revenue reduction of £39m was met by a £40m increase in wage costs. Operating losses stood at a record £241m, while pre-tax losses were increased by £170m.
“The 2012/13 wages to revenue ratio for Championship clubs of 106% is the highest ever recorded by an English division and is clearly unsustainable without ongoing owner support,” said Bull.
“The introduction of the Championship Financial Fair Play Rules was widely seen, and advocated by the clubs who voted it in, as a necessary step to change clubs’ behaviour.
“The severity of the punishments applied to those who have not complied with the rules in the 2013/14 season and the eventual result of efforts to change the rules, will determine the extent to which they present an effective deterrent to widespread overspending.”