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Friday, May 30, 2008

Premier League Wages and Profits

The Premier League is generating more money than ever but only eight clubs are actually turning a profit says a Deloitte study of the 2006-07 season.

In 2006-07 Premier League clubs' salaries rose 13% - slightly ahead of a median 11% rise in revenue - and the situation is worse in the Championship as average wage increases of 14% outstripped median revenue growth of 3%.

There are startling disparities between the important wages-to-turnover ratios at clubs in England's top two divisions.

The average Premier League figure stood at 63% and the Championship level at 79% but there was a lot of variance. Tottenham had the lowest wages/turnover ratio or just 42%, followed by ManYoo (44%), Arsenal (50%) and then the two Sheffield clubs.

Liverpool stood at 58% and Chelsea was a high 70% - but then with a Russian sugar-daddy normal financial metrics mean little to the Blues at present.

There were high figures figures of 80% and 85% at Middlesbrough and Blackburn respectively. Alarmingly, Sunderland's ratio was 90% and Derby's 125%. But the latter two probably reflect the payment of performance-related bonuses to players for winning promotion.

Overall, only eight Premier League clubs showed operating profits, namely Manchester United, Arsenal, Liverpool, Tottenham, Newcastle, Reading, Sheffield United and Watford.

If your club isn't on this list then they're spending beyond their earnings - and any downturn in fotoball revenues could hit home hard ...

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