New Broadcast Deal to Boost Premier League Revenues by 25%

Premier League clubs saw their revenue reach a record £2.36bn ($3.65bn) in 2011-12 and estimates show revenue grew to £2.5bn ($3.9bn) in 2012-13.

The report by football finance experts at Deloitte predicted that next season will see a further £600m ($927m) growth, or 25%, thanks to the new broadcast deal that is set to kick in.

This would take the projected revenue of Premier League clubs beyond the £3bn ($4.6bn) mark for the first time in history.

Dan Jones, partner in the Sports Business Group at Deloitte said: “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.”

Wage bills soar

Despite revenue across the top 92 clubs in England exceeding £3bn ($4.6bn) in 2011-12, Jones admitted conerns remained over wage bills, with 75% of Premier League clubs’ revenue increase in 2011-12 being spent on wages.

“It is the age-old picture; revenues continue to be healthy and wage levels continue to be a concern,” said Jones. 

Clubs in the Championship spent £53m ($82m) (13%) more on wages in 2011-12, which is due in part to the amount of clubs that received parachute payments.

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.”

Debt

Debt in the Premier League however, was less concerning than it was four or five years ago.

In the summer of 2012, total debt in the Premier League was at £2.4bn ($3.7bn), of which £1.4bn ($2.2bn) was in interest-free soft loans from owners.

“When you look at how much of that is in soft loans, the interest-paying debt that is left is not that much,” Jones added.

New broadcast to increase fortune

The report also showed how the ‘step-change’ in the UK pay-TV market was the emergence of BT Sport.

BT Sport will broadcast 38 live Premier League games and are also offering their services for free, for all of their broadband customers.

Jones described BT as the ‘biggest beast’ Sky Sports had ever come up against and suggested that ‘the scale and pace of the channel’s success may have a huge impact on football’s longer-term financial fortunes.’

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