English Premier League football clubs slashed their pre-tax losses in 1996/1997 thanks to a #50m advance payment by BSkyB, a new report by Deloitte & Touche reveals.
Deloitte’s review of England’s top 20 clubs found they generated a turnover of #455.4m, but made a combined loss of #9.4m. The loss figure was down considerably on the year before but only because of the money pumped into football by the satellite broadcaster.
Day-to-day activities of the clubs – before transfer activity and finance costs – generated profits of #86m, compared to #55.8m the year before.
Wage costs rose by 31%, with players winning average pay hikes of 35%, while matchday income was up from #163.2m to almost #200m.
Manchester United was the most financially successful club with turnover of #87.9m – more than double the turnover of its nearest rival, Newcastle United.
Gerry Boon, editor of the report and chairman of Deloitte’s football industry team, said television income would grow in importance, with BSkyB pumping a further #693m into the game over the next four years.
‘With clubs’ cost bases as they are, football really needs this income,’ said Boon, who predicted modest increases in operating profitability for the sector. Boon warned that the key to future financial success will be tight wage control and income growth.
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