SOCCER PREMIER LEAGUE:WAGES AT Premier League clubs have shown a worrying 11 per cent leap to €1.6billion overall, according to an annual report of football finance.
Business analysts Deloitte’s report claims the rise is a concern because wages last year accounted for 67 per cent of the turnover of all 20 clubs – a notable increase after a decade where the proportion had stayed between 58 per cent and 62 per cent.
Experts believe the change could pose a problem to the English top flight with Uefa’s new rules saying that from 2012 clubs in European competition will only be allowed to spend what they earn.
The clubs’ wage bill rose by €160 million over the previous year and Dan Jones, director of Deloitte’s Sport Business Group, said that should act as a warning – especially in the light of Portsmouth being forced into administration by overspending.
Jones said: “The wages increase is definitely something people should be concerned about, and that will be even more the case when the Uefa initiatives are in full swing.
“This report clearly shows there is an issue there to be dealt with.
“The revenue story is still very positive and has proved resilient to the recession but the clubs have to get costs under control.”
The report shows the most rapid inflation in Premier League wages has been in the group of 13 clubs outside the “big four” – Arsenal, Chelsea, Liverpool and Manchester United – and the three newly-promoted clubs.
Reliance on “sugar daddies” such as Manchester City’s Sheikh Mansour is also increasing.
The report states: “A model of profit maximisation is now pursued by a very limited number of clubs and, whilst some clubs seek to break even on a consistent basis, the emerging norm for many Premier League and Championship clubs appears to require significant ongoing benefactor support.
“As such we appear to be seeing a continuing shift from a sustainable “not for profit” model towards one with potentially calamitous consistent and significant loss-making characteristics.”
The situation in the Championship is particularly concerning with wage inflation outstripping revenue growth and annual operating losses having trebled in four years.
One positive note for the Premier League is it remains the least-polarised league compared with the others of comparable size in Europe. Spain is the most polarised, where Barcelona and Real Madrid far outstrip other Primera Division clubs in income.
Jones added: “The Premier League is fairly even in that sense and that should get even more so in relative terms because the next big increase in television money is in overseas TV rights and that is split evenly between the 20.
“In Spain, the gap between Barcelona and Real Madrid and the rest is vast and not getting any smaller and that can’t be great for their league in the long term.”
