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Report cites influx, outpouring of money in Premier League
England - 08 August, 2007
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PKF released its sixth annual report on the finances of British football, with approximately 70 percent of the finance directors in England and Scotland taking part.
59 finance directors, including two thirds of the clubs in the English and Scottish Premier leagues, took part in the survey, making this the most comprehensive report to date.
According to Charles Barnett, Partner at PKF Football Industry Group, some of the conclusions drawn from the report include television money which now has a major influence over the future of the whole game and, with overseas deals netting additional millions for the top English clubs, it is clear that the international appeal of the Premiership and its clubs continues to scale new heights.
Whether this amount of money is ultimately in the game and clubs' best interests is another matter and there are clear signs that the football economy is overheating with potentially dire consequences for those that miscalculate or fail on the pitch.
The English Premiership's domestic and global TV deals, worth more than £2.3 billion over the next three seasons, have generated huge wealth for its clubs and made the importance of the relegation/survival equation even more extreme. The additional revenue is evident in the spending projections for English Premiership clubs and the gap has grown between the relative importance of broadcasting rights and ticket sales in the top tier.
The knock-on effect of Premiership TV money is equally apparent in the Championship with the battle for promotion places being hard-fought both on the pitch and the balance sheet. With the Championship play-off final for the third promotion spot valued at up to £60 million, the game, if only in financial terms, is far more important than the Champions League final. It is, therefore, no surprise that it is these Finance Directors who find themselves under the most pressure to spend money – and perhaps more than the club can afford.
Arguably the Championship has become the football pressure cooker. The research shows that four clubs out of every five in the second tier predict they will not make a pre-tax profit in their next accounting period. The glittering prize of Premiership status requires significant investment but the investment gamble will pay off every year for only three clubs.
Of course, a lot of football is played outside the English Premiership and Championship, and the issues facing the top two tiers in England are mirrored, albeit to a lesser degree, in Scotland. The challenge for Scottish clubs is perhaps different. Success in the Scottish Premier League opens up the opportunity for European football but, with far less money available to mount a serious challenge, the chance of winning the Champions League remains a distant prospect.
The full report can be downloaded from PKF website.
59 finance directors, including two thirds of the clubs in the English and Scottish Premier leagues, took part in the survey, making this the most comprehensive report to date.
According to Charles Barnett, Partner at PKF Football Industry Group, some of the conclusions drawn from the report include television money which now has a major influence over the future of the whole game and, with overseas deals netting additional millions for the top English clubs, it is clear that the international appeal of the Premiership and its clubs continues to scale new heights.
Whether this amount of money is ultimately in the game and clubs' best interests is another matter and there are clear signs that the football economy is overheating with potentially dire consequences for those that miscalculate or fail on the pitch.
The English Premiership's domestic and global TV deals, worth more than £2.3 billion over the next three seasons, have generated huge wealth for its clubs and made the importance of the relegation/survival equation even more extreme. The additional revenue is evident in the spending projections for English Premiership clubs and the gap has grown between the relative importance of broadcasting rights and ticket sales in the top tier.
The knock-on effect of Premiership TV money is equally apparent in the Championship with the battle for promotion places being hard-fought both on the pitch and the balance sheet. With the Championship play-off final for the third promotion spot valued at up to £60 million, the game, if only in financial terms, is far more important than the Champions League final. It is, therefore, no surprise that it is these Finance Directors who find themselves under the most pressure to spend money – and perhaps more than the club can afford.
Arguably the Championship has become the football pressure cooker. The research shows that four clubs out of every five in the second tier predict they will not make a pre-tax profit in their next accounting period. The glittering prize of Premiership status requires significant investment but the investment gamble will pay off every year for only three clubs.
Of course, a lot of football is played outside the English Premiership and Championship, and the issues facing the top two tiers in England are mirrored, albeit to a lesser degree, in Scotland. The challenge for Scottish clubs is perhaps different. Success in the Scottish Premier League opens up the opportunity for European football but, with far less money available to mount a serious challenge, the chance of winning the Champions League remains a distant prospect.
The full report can be downloaded from PKF website.
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