Mixed fortunes for our Premier League clubs – Deloitte report

THE rewards and risks of chasing Premier League success have been starkly highlighted in Deloitte’s Annual Review of Football Finance 2013.

Aston Villa, the largest club in the Midlands in revenue terms, made a £33m operating loss in 2011/12 – the highest in the division, reflecting a poor season under manager Alex McLeish.

But Stoke City and West Brom saw revenues increase as their Premier League status stabilised.

Deloitte’s study shows Villa’s revenue was £79.8m in 2011/12, down 13% on the previous year. Stoke City’s revenue was £70.7% (up 5%) and West Brom’s was £66.7m (up 2%).

Birmingham City – not in the Premier League last season – saw revenue drop by 36% year on year to £39.1m while Wolves – relegated to the Championship in 2011/12 season – saw revenue dip by 6% to £60.8m.

The Midlands’ 15 Premier League and Football League clubs had combined revenue of more than £400m in 2011/12.

Nationally, Premier League clubs’ revenue reached a record £2.36bn in 2011-12, according to football finance experts at the accountancy firm.

It estimates revenue will grow by a further £600m, or 25%, in 2013-14, when the league’s new broadcast deal kicks in.

Deloitte says this should take the projected revenue of Premier League clubs above £3bn for the first time.

It says this cash, plus new spending rules, “could provide huge benefits to the long-term development” of football.

“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 Dan Jones, partner in the sports business group at Deloitte.

However, worries remain about the proportion of revenues being spent on player wages.

Almost 75% of the Premier League clubs’ revenue increase in 2011-12 was spent on wages, which increased by £64m, or 4%, to £1.7bn. It meant the overall Premier League wages-to-revenue ratio remained at 70%.

In the summer of 2012, the Premier League clubs had a total debt of £2.4bn.

But Jones said that debt in the Premier League was much less of a concern than it was four or five years ago, adding, “when you look at how much of that is in soft loans, the interest-paying debt that is left is not that much”.