Last season’s Premiership clubs earned a record total revenue of more than £2-billion in 2009-10. Alongside this the combined pay of the Premiership players’ hit a record high and is forecast to keep on rising.
UEFA guidelines suggest that clubs should limit the ratio of wages to turnover at 70%. Half of the Premiership teams failed to do this last season. Clubs spent an average of 61.78% of their turnover on wages.
It won’t be too much longer before other clubs follow the like of Portsmouth into administration given the unsustainable nature of some clubs debts and wages.
Celebrity chef and joint majority shareholder at Norwich Delia ‘let’s be havin you’ Smith has stuck her oar in on the matter stating that the financial structure of English football is “radically wrong” and that ‘The disparity between English clubs has never been greater in terms of finances’. Here is a look at both ends of the financial spectrum in the Premiership.
Top of the food chain
Only six Premier League clubs reported profits in 2009 with Arsenal, Manchester United and Tottenham Hotspur leading the table.
Arsenal look to be one of the best run clubs in the Premiership financially, having the highest turnover of £313.3 million and the lower percentage of turnover being spent on wages with 33.2%. Last season Arsenal made a profit of £45.5 million, just another £237 million to go until the club is out of debt!
Impressively Stoke City are one of only three clubs, the other two being Chelsea and Man City that have no debt whatsoever. This coupled with a wages to turnover ratio of only 55.6% means that its unlikely they will be going into administration any time soon
Looking the colossal debts that Manchester United has accumulated it is easy to understand why the Manu supporters are so angry with the Glazers. Manchester United are currently trapped in the paradox of being top of the league of profit and top of the league of debt. They also have the second highest wage bill. Due to the size of their profits, wages only take up 44% of their turnover which is much healthier than the majority of the teams in the Premiership and helps explains how they are able to continue to operate under such heavy levels of debt.
No company can hope to operate at a loss for very long and still expect to be in business and football clubs are no exception. The following clubs might be nearing the situation where calling one of those companies you see advertised on TV who promise to solve all your financial woes by ‘consolidating all your debt into one easy monthly payment’ seems like a good idea.
Aston Villa’s financial statistics do not look good. Their wage to turnover ratio is 76.8% and their debt is £71.9 million which explains why they are willing to part with some of their best players to decrease their wages and increase their turnover.
Sunderland is another club with financial problems. The club has £91.1 million of debt and made a loss of £23.5 million last season. Steve Bruce said of his limited transfer budget for the summer and the clubs financial situation that “I have had to wheel and deal this summer. I have had to go out and generate some money, we have had to get people out to balance the books’. The Black Cats have been listening to offers for Anton Ferdinand, George McCartney and Teemu Tainio in the hope of trimming the club’s wage bill.
Burnley had the lowest wage bill in 2009 but it still managed to exceed the clubs turnover. Their wage to turnover ratio was 119.9%. The clubs debt is relatively low at £11.9 million but surely their wages/turnover ratio will have to be brought down to nearer the UEFA’s guideline in order to avert financial problems in the long run.
Follow me on Twitter at: http://twitter.com/j0n4th4nl33