PracticeConsultingDeloittes report shows dive in soccer profits

Deloittes report shows dive in soccer profits

Profits made by football clubs in the English Premiership more than halved over 1998/99, according to a report by Deloitte & Touche.

Club revenues continue to rise with the profile of the sport with more income from gate receipts, sponsorship deals and television money. But although average club income stood at a record-breaking £33.5m, higher spending in the transfer market meant profits shrunk by £22.7m to £18.7m compared to the previous season.

Player transfer costs and in particular Premiership stars’ spiralling wage demands are highlighted as the key to the profits slump with wages for the Premiership increasing by 31% in the 1997/1998 season. Although the rate of increase has fallen, the rise still outstrips the growth in turnover.

But soaring wage packets boosted PAYE and National Insurance payments to the Treasury to £194.6m in 1997/98, a rise of 27%.

Gerry Boon, chairman of the Football Industry team at Deloittes, said the financial challenge of top-division survival remains the hardest to overcome.

‘Big clubs are dominating – size does matter,’ he said.

The report England’s Premier Clubs is a prelude to Deloittes’ well-known annual review of football, which covers all 92 football league clubs and is published later in the year.

English Premier League clubs now paying £180m a year tax

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