English clubs to get 25% revenue rise - study

06 June 2013 09:00

English Premier League clubs will enjoy a revenue boost of almost 25 percent next season thanks to a glut of lucrative new television deals, according to a report published on Thursday by financial analysts Deloitte.

A trio of television rights agreements estimated to be worth £5.5 billion ($8.5 billion, 6.5 billion euros) are due to kick in when the 2013-14 campaign gets under way, as the English top flight cashes in on its position as the world's most popular football championship.

The new deals include a $250 million contract with US broadcaster NBC, which will see 380 matches broadcast to American fans over a period of three years.

England struggled in this season's Champions League, failing to provide a single quarter-finalist for the first time since 1996, but Deloitte says the Premier League remains a formidable financial powerhouse.

"Premier League clubs' revenue is estimated to have grown by . five percent to £2.5 billion in 2012-13," said Adam Bull from the company's Sports Business Group.

"There will then be a significant increase of around £600 million, almost 25 percent, 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."

However, despite record overall revenues of close to £2.4 billion, half the clubs in the Premier League are still making losses and Deloitte says they must brace themselves for the "culture shock" of the new TV windfall.

The report predicts that outlay on player wages will continue to grow, but says clubs should try to manage the rise carefully so as to leave funds available to be invested in stadium improvements, youth development and the reduction of losses.

"Achieving a more sustainable balance between their costs and revenues and thereby generating more profits provides opportunities or, some might say, a culture shock for clubs," says the report.

"Increased profitability will allow greater longer-term investment in stadia and training infrastructure, youth development and community programmes.

"It also provides funds for the acquisition of talent, as clubs in the top flight can use the self-generated funds to transfer in and retain top playing talent to strive to improve the quality of football on show."

The report says that revenue generated by clubs in the Premier League reached a record £2.36 billion last year, following a growth in commercial revenue of 15 percent.

"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," said Deloitte's Dan Jones.

"The combined revenue of the Premier League clubs increased by four percent to almost £2.4 billion, with another year of impressive commercial revenue growth, largely focused among the highest ranked Premier League clubs, and relatively stable match-day and broadcast revenues."

Although Premier League clubs generated the highest revenue of any league in Europe, Germany's Bundesliga was the continent's most profitable championship, with operating profits of £154 million. The Premier League was second, with profits of £98 million.

This season's Champions League final at London's Wembley Stadium was contested by two German clubs, Bayern Munich beating Borussia Dortmund 2-1, and sparked fears in England of a continental 'power shift'.

The Premier League clubs this season agreed to a set of enhanced financial regulations to curb over-spending and Deloitte's figures showed that there was no growth in the overall amount of net debt in the division, with the figure remaining steadfast from 2011 at £2.4 billion.

Source: AFP