THE ASSOCIATED PRESS
LONDON — Top English soccer clubs are spending so much on players’ salaries that they are becoming less profitable even as they become more successful in Europe, according to an independent report released Thursday.
Business advisory firm Deloitte’s annual report for the 2006-07 European season showed that, despite providing three of the four Champions League semifinalists and increasing revenue by 11 per cent on the previous year, the Premier League was less profitable than Germany’s Bundesliga.
Growth in match day revenue, such as tickets and food, and commercial income pushed total revenue for the 20 Premier League clubs to C$3.03 billion, but wages grew by 13 per cent to more than $2.77 billion — more than twice that in Spain, Germany, France or Italy.
Deloitte had expected the acquisition in recent years of clubs by overseas investors, such as the purchase of Manchester United, Aston Villa and Liverpool by American businessmen, to lead to bigger profits as owners demanded a return on their investment.
But Dan Jones, a partner of Deloitte’s Sports Business Group, said that the company now believed that the traditional practice of clubs spending any extra revenue to gain an edge on the field was continuing.
"It is arguable that the new owners’ strategies have been at the forefront of the trend," Jones said. "It may be the case that owners see their clubs delivering only minimal regular returns, with a real return only emerging when the club changes hands."