UK: Football Finances (The Sport Lawyer)

Last Updated: 31 October 2011
Article by Andrew Nixon

As the transfer window closes, we thought it would be a worthwhile time to provide a headline overview of the finances of the sport.

We have also set out below the key points from this summer's Deloitte Annual Review of Football Finance.

As always when considering football finances, it is important to keep in mind the considerable transformation the sport has undergone since 1992 and the advent of the Premier League. That transformation is reflected not only in the revenue it generates, but also the national and international profile of the sport, and the match day attendance figures. Crucially, the broadcasting revenue has also increased considerably, which has boosted the revenues of clubs, particularly those in the Premier League. Of course, these new revenue streams have led to a huge surge in wages, and that wage growth has been relentless, and looks likely to continue. Operating margins have dropped from 16% to 4% over the lifetime of the Premier League, while collective debt stands at £3.5billon. The wage/revenue ratio is 88% for Championship clubs, which although is a slight improvement from 90% still remains worryingly high.

The oft-repeated desire to reduce the wage ratio remains understandable; however, as The Sport Lawyer commented last summer football, as a sport and economic island, has shown remarkable resilience to the downturn, and that can only be due to the sport's (and in particular the Premier League's) huge popularity, both domestically and abroad. The 'stepped' television deal will continue to inject considerable revenue and match day attendance, and ticket revenue remains consistently strong.

The drop off in the sponsorship market has not stopped some clubs attracting large sponsorship deals, and stadium naming rights deals (one of which is under scrutiny by UEFA). The problem, of course, is that there are many 'have not's' throughout the Football League (and indeed the Premier League) and there is little doubt that football remains propped up by the broadcasting revenues. As a business model, this is unworkable, but then football is not your typical business model.

Perhaps the most revealing statistic is that there is a strong correlation between wage spends and the position clubs finish in the league: with this being the case, the desire for success will continue to outstrip the need to be financially sustainable. For some clubs, particularly those with wealthy benefactors, that does not pose an immediate problem. For others, the scenario can be very different.

The following key points from this summer's Annual Review of Football Finance by Deloitte are of interest and worth noting:


  • The European Football Market grew by 40% to EUR16.3billion, with broadcasting revenue labelled as the biggest revenue driver (up 8% to EUR4billion);
  • The Premier League had the highest revenue in Europe (EUR2.5billion), followed by the Bundesliga (EUR1.7billion);
  • La Liga revenues grew by 8% to just over EUR1.6billion. Interestingly, much of this revenue is down to the collective revenue of two clubs: Real Madrid and Barcelona;
  • The Revenue of Serie A increased by 3%, to EUR1.5 billion, leaving it in 4th place of the 'big four' leagues. Ligue 1 is in distant 5th place (revenue of EUR1.072billion);
  • Only the Premier League and the Bundesliga reported operating profits, with the Bundesliga generating the highest profits (EUR138million), and the Premier League generating EUR101million.

It will be interesting to see what the much needed, and much heralded, intervention by UEFA in the form the Financial Fair Play Regulations, will have on these figures over the coming 24 months.


  • Total revenues of the 92 league clubs grew by 5% to almost £2.7billion;
  • As stated above, Premier League revenues increased by 2% to exceed £2billion for the first time
  • Premier League broadcasting revenues increased by 7%, to become the first £1billion broadcasting revenue stream in any domestic football league;
  • Premier League clubs' commercial revenues increased by 6%, to £459million.
  • Match day revenues fell by 7%;
  • Championship clubs' revenues increased by 9%, to exceed £400million for the first time;
  • There was a small improvement in Premier League operating profits (to £83million);
  • Premiership losses increased to £445million, which is record low;
  • Championship clubs' operating results also worsened, for the 6th consecutive year to £133million;

Wages and transfers

  • For the second consecutive year, Premier League clubs' total wages outstripped revenue growth;
  • Chelsea expended the most on wages (£174m), followed by Manchester City (£133m) and Manchester United (£132m);
  • Only West Ham and Wigan reported deductions in wage spend;
  • There was a correlation between wage spend and league position;
  • Championship clubs' wages grew by 6% to £357million
  • Total agents fees paid by the Premier League and Football League clubs remained at £80million, representing 13% of the top 92 clubs' gross transfer expenditure.

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