Football finances. Prem v championship

http://www.bbc.co.uk/news/business-36412394

Increasingly large TV deals are helping English Premier League clubs to enter "a new era of sustained financial performance", according to Deloitte.

It says the current TV deals saw Premier League clubs generate £3.3bn record revenues in 2014-15, up by 3%.

Top flight clubs also recorded a second straight year of pre-tax profits in 2014-15, for the first time since 1999.

With more lucrative TV deals from 2016, Deloitte says clubs are "looking at at least three more years of big growth".

'Turned the corner'
Launching its 25th Annual Review of Football Finance, Dan Jones from the business consultancy's Sport Business Group said: "What we are seeing is a continuation of club profitability, it is certainly not a one-off.

"We feel Premier League clubs have turned the corner, and are entering a new era of sustained profitability. Clubs are now attractive propositions to investors, and not merely as vanity projects."

He said increased profitability meant that top flight English clubs could compete with overseas teams in order to buy up the best players in the world, and still have money left in reserve.

From 2016-17 clubs will receive even more cash from broadcasters, with Sky and BT Sport paying a record £5.136bn (up from £3.018bn in 2013-16) for live Premier League TV rights for three seasons.

"When the enhanced new broadcast deals commence in the 2016-17 season, operating profits could rise as high as £1bn," Mr Jones said.

He also said that it was encouraging to see that much of this new-found TV wealth was being spent by clubs not only on players, but also on improving stadia and infrastructure.

Wage costs
"The pace of football's financial growth in two and a half decades is staggering," said Mr Jones, referring to the foundation of the Premier League in 1992.

"By half-time of the second televised Premier League game next year, more broadcast revenue will have been generated than during the whole of the First Division season 25 years ago."

He added: "The impact of the Premier League's broadcast deal is clear to see. For the first time, the Premier League leads the football world in all three key revenue categories - commercial, match day and broadcast - and this is driving sustainable profitability.

Although the wages/revenue ratio has increased for the Premier League clubs, Mr Jones does not see this as cause for concern.

"Wage costs grew at a faster rate than revenues in 2014-15 and as a result the division's wages/revenue ratio rose from 58% to 61%," he said.

"However, this represents the second lowest level since 2004-05 and is 10 percentage points lower than in 2012-13.

"In fact, in the last two years, only 30% of revenue increases have been consumed by wage growth, whereas in the five years to 2012-13 this figure was 99%."

• Broadcast rights deals saw Premier League clubs enjoy the second-highest level of both operating profits (£546m) and pre-tax profits (£121m) in 2014-15
• A total of 17 Premier League clubs recorded an operating profit; 14 recorded a pre-tax profit
• Clubs' wage costs increased by 7% to exceed £2bn for the first time
• Clubs' revenues were more than €2bn (£1.5bn) higher than the next highest earning league, Germany's Bundesliga
• Premier League matchday revenues now account for about one-fifth of club revenues
• Clubs' combined gross spending to acquire players was a record-high of £1.1bn
• Clubs' net debt remained at £2.4bn with interest-free soft loans, usually from owners, accounting for 75% of the total

European leagues
The 92 clubs in the English Premier League and Football League generated more than £4bn in revenues for the first time in 2014-15, a new record.

Meanwhile, the UK government's tax take from the top 92 professional football clubs in 2014-15 was roughly £1.5bn, up from £1.4bn the previous season.

Deloitte's review of football finance also found that combined revenue for the "big five" European leagues (England, Germany, Spain, Italy, and France) rose 6% to a record €12bn (£9.2bn) in 2014-15.

While the Premier League, Bundesliga and Spain's La Liga were profitable, Italy's Serie A and France's Ligue 1 generated combined operating losses.

'Unsustainable'
In England's second tier, the Championship, combined revenues grew 12% to £548m in 2014-15, exceeding £500m for the first time.

"Wage costs rose by 4% to £541m which, despite a reduction in the wages/revenue ratio from 106% in 2013-14 to 99%, means clubs spent almost as much on wages as they generated in revenue," said Deloitte.

"This remains an unsustainable level of spending without the support of owner funding. This resulted in operating losses of £225m and a combined pre-tax loss of £191m."

In Scotland, Celtic's failure to qualify for the group stages of the Champions League contributed to a fall in Premiership clubs' aggregate revenues of 9%, or some £13m.

However, the Glasgow club still accounted for 50% of all revenues in the division, as they lifted the title for a fourth successive year.

Deloitte said a new deal to market the international (non EEA - European Economic Area) TV rights meant Scottish football was now being shown in more than 100 countries.

 

"By half-time of the second televised Premier League game next year, more broadcast revenue will have been generated than during the whole of the First Division season 25 years ago."

 

I hadn't realised that there are 100 countries out there so bloody bad they must now receive Scottish football . . .

 

Fox Soccer Channel brings at least one Scottish Premier League match to the USA every weekend, though most often they bring two. And about every other weekend on the average they bring a Scottish Championship match. Considering the fact that at least 80% of those matches included Rangers, it won't be surprising if Scottish Championship matches disappear from American channels following Rangers promotion back to SPL. I estimate about half of the SPL matches shown involved Celtic.

I hope they continue to bring SPL to US markets. One hasn't lived until he's seen Hamilton Academical play.

 

Seeing Joey Barton smack seven shades of **** out of Scott Brown is widely anticipated in Outer Mongolia.

 

More than seven over the border

 

Scary looking at that wage-to-revenue ratio for the Championship.

 

It was.

 

That, plus the financial clout of relegated teams in the future, mean it's going to be harder and harder for non-parachute clubs to get promoted.

That win was worth far more than the £200-£300 mill. Diame's goal was the most crucial in our clubs history, possibly in football as a whole.

 

There is no excuse next season for ALL Premier League clubs to return a profit. This is a golden - both figuritively and literally - opportunity to put right the mass financial mismanagement of the past decade. Across the division as a whole, players are already the best paid here, it's not like this extra money has to be used to entice them.

 

Their agents will be well aware the clubs have got all this extra lolly.

 

I realise that, but what's the competition? Unless they're signing for Real Madrid, Barca, PSG or Bayern they're going to be paid better here anyway. And that's the point, the clubs can continue paying at the same level - or just slightly better - and trouser the rest.

 

That makes sense, but people have been saying it for years and still we see the likes of Blackpool, Burnley, Bournemouth manage it. One year Leeds almost made the playoffs!

 

Interesting for those who believe Allams have given us money, that 75% of net debt is interest free loans from owners.
That puts us at several million disadvantage to most of our competitors.

 

This is what many supporters from others clubs don't get, he's charging interest on everything he's put into this club.

 

Why should they get it? Why would they follow our club with as much interest as we do?

 

How much do you think the "alleged" new owners from USA/China would take out?

 

Definition of " take out " is interesting. Many clubs use financing models using the clubs income to pay significant interest ie the Glazers

 

What evidence is there to suggest they'll do anything bad

Let's give them a chance rather than writing them off based on nationality.

 

Absolutely this. You can't equate a nationality with a business style. A bad owner is a bad owner.