LONDON: The English Premier League’s revenue generation reached a record £2.36 billion in 2011-12 with the League’s huge impending broadcast rights deal and new financial regulations providing an opportunity for the competition to bolster its position at the head of European football, according to a new report.
The 22nd Annual Review of Football Finance from the Sports Business Group at Deloitte detailed that the total European football market grew to a record £15.7 billion in 2011-12. Premier League clubs generated the highest revenue of any league in Europe, followed by Germany’s 1.Bundesliga (£1.5 billion), Spain’s Primera Division (£1.4 billion), Italy’s Serie A (£1.3 billion), and France’s Ligue 1 (£900 million).
The Bundesliga remained Europe’s most profitable league with operating profits of £154 million, followed by the Premier League, with operating profits of £98 million.
The business services group said the 4% rise in revenue for the Premier League was aided by another year of “impressive commercial revenue growth,” largely focused among the highest ranked clubs, and relatively stable match day and broadcast revenues. Deloitte said Premier League clubs’ revenue is estimated to have grown by a further 5% to £2.5 billion in 2012-13.
The Premier League secured a huge 70% rise in the value of its domestic broadcast rights in June 2012, with BSkyB and BT splashing out a combined £3.018 billion in an agreement spanning the 2013-14 and 2015-16 seasons. This figure will be further enhanced by overseas rights deals, with the report stating Premier League revenues will see a significant increase of around £600 million, almost 25%, in 2013-14, taking the projected revenue of Premier League clubs above £3 billion for the first time.
Almost 75% of the Premier League clubs’ revenue increase in 2011-12 was spent on wages, which increased by £64 million (4%) to £1.7 billion and resulted in the overall Premier League clubs’ wages to revenue ratio remaining at 70%. Alan Switzer, director in the Sports Business Group at Deloitte, noted: “The aggregate operating profit of Premier League clubs improved to £98 million in 2011-12, though this is a margin equivalent to only 4% of revenue with half of the clubs making an operating loss.
“The Premier League clubs have agreed to a system of enhanced financial regulations, designed to improve the sustainability of its clubs. The successful implementation of these rules, coupled with the imminent boost to broadcast revenues, could provide huge benefits to the long-term development, growth and stability of the game and its clubs.”
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