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SBD Global/June 6, 2014/Finance

Deloitte Review: English Premier League Player Salaries Hit New High

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The Premier League saw another uptick in player wages last season.
Wages in the Premier League "spiraled upwards even as top flight football clubs in Germany and Spain reined in spending on players’ salaries" -- while still outperforming English clubs on the pitch, according to Duncan Robinson of the FINANCIAL TIMES. Deloitte’s Annual Review of Football Finance revealed that the ratio of wages to revenues in the Premier League hit 71% in the '12-13 season -- "its highest ever level." This rise in Premier League wage spend "came in stark contrast to the top flight in Spain, where the ratio fell to its lowest level in more than a decade." La Liga clubs spend 56% of their revenues "on players’ salaries." In the Bundesliga, "this figure drops" to 51%. The relative frugality of German and Spanish clubs "has not negatively affected their performance." The final of the Champions League was this year "fought out by Atlético Madrid," who knocked out Chelsea on the way, and Real Madrid (FT, 6/5). The BBC's Bill Wilson reported analysts at Deloitte said that Premier League clubs' revenues broke the £3B ($5B) mark in the recent '13-14 season. They said that "the figure has been hit just four years" after passing £2B ($3.3B), and that "revenues have doubled in seven years." Deloitte's Sports Team Head Dan Jones said, "A remarkable achievement in isolation, but phenomenal in the wider economic context of that same period." He said that "the battle between TV firms for Premier League rights was key to driving the league's revenues higher." Jones: "The entry of BT Sport into the market to compete with BSkyB has applied huge upward pressure to broadcast revenue -- from the 2013-14 season onwards each domestic live game on average generates broadcast revenue of £6.5 million" (BBC, 6/4). REUTERS' Keith Weir wrote the EPL's already "well-heeled" football stars were the biggest winners as growing competition for TV rights helped to lift revenue at its clubs to a record £3.2B ($5.4B) last season. However, the extravagant spending of British clubs "makes them far less profitable than their rivals in Germany, where club ownership and finances are more tightly regulated and player wages are not as high." German clubs "spend a little more than half of their income on wages." The finances of European football "have also been shaped by big-spending Russian and Middle Eastern owners over the past decade" (REUTERS, 6/4).
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