Deloitte: FAPL wages to top £1bn next season

28 Apr 2008

By: Sport Industry Group

Deloitte’s annual review of football finances has predicted that wages in the FA Premier League will total more than £1bn for the first time next season.

The report revealed that salaries and bonuses would increase next season in line with the FA Premier League’s new £1.7bn TV rights contract which begins in August.

The latest report, which monitors revenues across the top flight for the 2005/06 season, saw wages rise 9% to £854m.

Unsurprisingly, Chelsea were top of the pile in terms of individual club wage bills, outlaying £114m on player salaries and bonuses for the 2005/06 season.

Manchester United came in second with a wage bill of £85m followed by Arsenal (£83m), Liverpool (£69m) and Newcastle United (£52m).

Wages paid to players in England again outstripped their European counterparts. The total wage bill in Italy, the second biggest in Europe, was 35% below the English level at £548m while clubs in the Spanish La Liga paid a total of £502m to their players.

In terms of overall revenues Manchester United was once again top of the league, making £167.7m. United was followed by Chelsea on £152.8m, Arsenal on £133m and Liverpool on £121.6m.

Only nine Premiership clubs, however, actually made a pre-tax profit - down from 14 in 2004/05.

The report confirmed that the Barclays Premiership was once again the top-earning league in the world beating Italy, Germany and Spain.

The 20 top-flight English clubs generated £1.4bn in turnover on 2005/06, a figure expected to rise to £1.8bn in 2007/8.

With the new three-year broadcast deal kicking in, worth an extra £300m a season, revenue will increased further still for 2007/08 with Deloitte predicting it to almost double combined operating profits to £260m next season.

Although income is on the rise, Deloitte said the wave of new owners at clubs, including Aston Villa and Liverpool, was likely to result in more restraint in spending, with servicing debt and investing in stadia being other key priorities.

‘A lot of these new owners have had sporting success but also considerable financial success,’ said director of Deloitte's Sports Business group, Alan Switzer.

‘A decent chunk of the money will still flow through to the players, but we don't think it will be the same proportion that flowed through previously. Whilst wages will rise, clubs do have the opportunity to increase the importance of performance related pay structures.

‘This will both insulate the business in future when on-pitch results are not so good, and also help motivate and reward players and management for winning.’