Premier League stretches wealth gap over Europe rivals

05 June 2014 01:16

English Premier League clubs made more than $5 billion in 2013/14 and are stretching their wealth gap over European rivals even though the Bundesliga remains the most profitable championship, a study released Thursday said.

Sky-high wages -- the average Premier League player earns more than £1.6 million ($2.7 million) a year -- have eaten into Premier League profitability. But the Deloitte Annual Review of Football Finance saw no end to the league's growing riches.

The league's combined revenues for 2013/14 will increase by almost a third to hit £3.2 billion ($5.3 billion), said Dan Jones of Deloitte's sports business group.

The audit and consulting firm called the league's financial performance "phenomenal" in the global economic climate.

Premier League revenues will reach about £4 billion for 2014/15 as extra broadcasting money pours into the English game, predicted Deloitte senior sports business consultant Austin Houlihan.

The review gave exact figures only for 2012/13 when the Premier League made 2.9 billion euros ($3.9 billion), while the German league earned two billion euros, Spain 1.9 billion euros, Italy 1.7 billion euros and France 1.3 billion euros.

The big five leagues together saw revenues grow 5% in 2012/13 to 9.8 billion euros, now representing almost half of the overall size of the European football market of 19.9 billion euros.

Wages for Wayne Rooney and the army of other Premier League stars accounted for 2.1 billion euros, or 71%, of the English revenues, meaning that the league's profitability fell to three percent.

In Germany, wages accounted for just one billion euros, or 51% of revenues.

The review said that while Premier League clubs made about 100 million euros in profit for 2012/13, Bundesliga rivals reported about 280 million euros in profit.

Manchester United, Manchester City and Liverpool accounted for most of the English growth in revenue. In Germany, Bayern Munich and Borussia Dortmund generated 80% of new revenues, said the review.

The power of the Premier League is seen in the fact that more than 100 players from English clubs were named in provisional squads for countries at the World Cup.

Their performances at the tournament, starting June 12, could increase transfer values "and that in turn could affect the value of clubs," Deloitte's Houlihan told AFP.

The visibility is also driving revenues for the Premier League.

Much of the extra cash is coming from domestic television deals since BT Sport entered the broadcasting rights battle against BSkyB.

Each match broadcast live now generates about eight million euros at home and abroad, said Deloitte.

And the league is also earning growing amounts from foreign markets in Asia, the Middle East and North America. Foreign television deals will bring in more than 2.7 billion euros over the 2013-2016 seasons, up 50% over the previous three years, the review said.

"Ownership of a Premier League club continues to be a trophy asset of global appeal," said the review.

"The quality and rivalry of the competition and the cosmopolitan spread of the players have all created an intense interest," said Houlihan.

He added that "a significant gap" will grow between the earning power of the Premier League and European rivals in coming years.

But English clubs are also ploughing increased amounts into wages in a bid to keep the best players and a place in the super-rich championship.

Deloite said it was likely that more than 60% of the extra revenue in 2013/14 will go on player wages.

It predicted overall spending on player salaries would reach a new Premier League record of about 2.7 billion euros. But the overall increase in revenue would bring the wage-revenue ratio below 70% for the first time since 2009/10.

UEFA, European football's governing body, has imposed stricter regulations on club spending, to make them live within their means.

"The early signs are that continental European clubs have generally reacted more rapidly and radically to this change than their wealthier English counterparts," said Deloitte.

Both the English Premier League champions Manchester City and French title winners Paris Saint Germain agreed sanctions packages with UEFA last month that will see them comply with UEFA's Financial Fair Play rules.

Source: AFP

World Cup Group G

Belgium 1 0 0 3 3
England 1 0 0 1 3
Tunisa 0 0 1 -1 0
Panama 0 0 1 -3 0
Last updated : 08:44