Football Management

Commentary on the management of over 160 English football clubs by Dr John Beech, winner of the FSF Writer of the Year Award 2009/10 Twitter: @JohnBeech Curator of Scoop.it! Football Finance

Premier League wages

Posted by John Beech on June 6, 2009

Deloitte’s Annual Review of Football Finance is eagerly awaited by fans of the football business, and this week’s appearance was no exception (1). Their view that, all in all, the Premier League garden is rosy, was repeated in reports such as that of the BBC, which is headlined “Premier League ‘defies downturn'” (2).

Over recent seasons I have been concerned with Deloitte’s penchant for equating ‘richness’ with ‘revenues’, and their latest report continues a trend of focusing on positives. Am I alone in thinking that they are in danger of slipping into putting a positive spin on things?

Take for example their reporting of a 62% figure for wages/revenue ratio for the Premier League (3), almost down to the level of 60% advocated by Michel Platini, and the figure now mandatory for League 2 clubs.

How meaningful is this aggregative figure when clubs have quite different base lines of revenues? The figure will inevitably be skewed towards the ratios of the clubs with the bigger revenues.

The day before the Deloitte’s Report hit the headlines David Conn of the Guardian had published his own survey of the finances of the Premier League clubs, giving details from the latest financial reports of individual clubs (4). These reveal that the revenues of individual clubs varied from the £252.6m of Manchester United down to the £43m of Wigan Athletic (and lower figures still for clubs such as Hull City where the latest figures cover their promotion season in the Championship, a factor which also affects the Deloitte aggregative figure).

It is worth recording the figures for wages/revenues as abstracted from Conn’s data (with figures covering clubs with Championship seasons italicised):

Stoke City – 106% of revenues of £11.2m
Wigan Athletic – 89% of revenues of £43m
West Bromwich Albion – 80% of revenues of £27.2m
Portsmouth – 78% of revenues of £54.7m
Hull City – 77% of revenues of £9m
West Ham United – 76% of revenues of £57m
Newcastle United – 74% of revenues of £100.8m
Fulham – 73% of revenues of £53.7m
Middlesbrough – 73% of revenues of £48m
Blackburn Rovers – 70% of revenues of £56.4m
Chelsea – 68% of revenues of £213.6m
Aston Villa – 66.7% of revenues of £75.6m
Bolton Wanderers – 66% of revenues of £59.1m
Manchester City – 66% of revenues of £54.2m
Everton – 59% of revenues of £76m
Sunderland – 58% of revenues of £63.6m
Manchester United – 47% of revenues of £256.2m
Tottenham Hotspur – 46% of revenues of £114.7m
Arsenal – 45% of revenues of £222.5m
(Liverpool – wages bill n/a; revenues of £159m)

These figures reveal, in addition to the wide variation between clubs:

  • that only three clubs are well within the figure of 60% (or the ‘average’ of 62%), with two other clubs just within it;
  • the high risk strategies pursued by Wigan, Portsmouth, West Ham, Newcastle, Fulham, Portsmouth, Middlesbrough and Blackburn;
  • the rather scary proposition that Manchester United and Arsenal might well have been even more dominant if they had not been constrained by their debt levels;
  • the high risk strategy that must be pursued to gain promotion from the Championship, and the further evidence this provides in support for the case for rocket payments (5)
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