Premier League Accounts Show Player Wages Still Spiralling (£1.8 Bn) And Debts Still Mounting (£2.4Bn)

[Sancho Panza]

'Premier League clubs paid their players and other staff a record £1.8bn in 2012-13, up 11% on the previous year, according to the Guardian's review of all the clubs' annual accounts.

Players earning multi-million pound salaries were again football's clear financial winners, in a year when the clubs made a record £2.7bn combined income, yet nevertheless made a loss overall, of £291m.

Twelve of the 20 clubs made a loss in 2012-13, with five clubs losing £50m or more: Aston Villa, Chelsea, Liverpool, Manchester City and Queens Park Rangers.

The figures are for the final year of the Premier League's last, 2010-13 round of television deals, worth £3.5bn, before the current massively increased deals, £5.5bn from 2013-16. They suggest that despite Uefa and the Premier League clubs themselves introducing financial fair play rules to discourage wage inflation, most clubs struggle to restrain spending on players as they compete with each other on the field, to succeed or avoid relegation.

The proportion of the income clubs spent on wages in 2012-13 was the same as in 2011-12, 67%, above the 50-60% threshold commonly recommended as sensible. Because clubs earned more money overall, principally from increased sponsorship secured by the top clubs, that meant the total wage bill rose.

Clubs do not differentiate in their accounts between wages paid to players and to other staff, but the overwhelming majority unquestionably goes in galactic earnings of players. Other staff have historically not been well paid at clubs, where there has been a culture of expecting people to consider it a privilege to work in football. The organisation Citizens UK is campaigning for catering and other workers at Premier League clubs to be paid a living wage rather than the minimum wage, of £6.31 per hour, which its survey found many are on. Only Manchester City, of the 20 current Premier League clubs, had responded by committing to paying a living wage, of £7.65 an hour, or £8.80 in London.

The clear exception to that culture of low pay, besides the players and managers, is in the boardroom, where senior executives are lavishly paid in the Premier League. The highest paid director in 2012-13 was Southampton's executive chairman, Nicola Cortese, who earned £2.129m. Next highest paid was Ivan Gazidis, who as Arsenal's chief executive earned £1.825m.

Salary packages of more than a million pounds went to the highest paid director at nine clubs altogether: Arsenal, Chelsea, Liverpool, Manchester United, Norwich City (which included a £867,000 bonus for hitting financial targets and remaining in the Premier League), Southampton, Tottenham Hotspur, West Bromwich Albion and West Ham United.

Despite the record income, earned from rights to live matches being sold exclusively to pay-television as they have throughout the Premier League's existence, the sponsorships and historically very expensive ticket prices, clubs' net debt increased in 2012-13, from £2.2bn in 2011-12 to £2.4bn.

A majority of Premier League clubs still rely on money from owners, whether paid in return for shares, like the vast £1bn invested in Manchester City over just five years by Sheikh Mansour bin Zayed Al Nahyan of Abu Dhabi, or loaned, as at Liverpool, Newcastle United, West Ham United and others. Roman Abramovich, the Russian oligarch, has funded Chelsea with £958m since 2003, loaned to his holding company, Fordstam Limited.

Football's largest bank debt was owed by Manchester United, which is still paying heavily for the Glazer family's 2005 takeover, for which the Glazers borrowed £525m, then making United responsible for paying it off. United still owed £389m in 2012-13, and paid £72m in interest and other finance costs. That pushed the club into a £9m loss, despite record income of £363m.

That loss, however, puts United comfortably within Uefa's £37m permitted figure for financial fair play, and it is Mansour's City, who lost £52m, following £99m in 2011-12, against whom Uefa are understood to be considering sanctions. City have always maintained that Uefa's exemptions, principally excluding salaries of players signed before the rules were introduced in 2010, will mean their finances comply, and that their £35m a year shirt, stadium and training "campus" sponsorship by the Abu Dhabi airline Etihad is fair market value, not a connected sweetheart deal for Mansour. They can be expected to argue strongly against any sanction from Uefa.

QPR, who spent heavily on players for managers Mark Hughes and Harry Redknapp but still went down to the Championship, made a £65m loss and had £177m net debt, much of it loans from owners Tony Fernandes and partners. Rangers' wage bill, £78m, was 128% of the club's entire income, and substantially higher than Champions League finalists Atlético Madrid, whose 2012-13 wage bill was €66m (£54m).'

[R K]

Twelve of the 20 clubs made a loss in 2012-13, with five clubs losing £50m or more: Aston Villa, Chelsea, Liverpool, Manchester City and Queens Park Rangers.

Top 3 are the biggest loss makers. Clearly not sustainable.

[interestrateripoff]

Great to see these clubs paying the staff that make match day happen the minimum wage. Luckily the PFA is supporting the low paid workers by campaigning for change...

This bubble has plenty of room to inflate further. The problem for these clubs is when they get relegated, the debt immediately becomes unsustainable without promotion straight back. If Birmingham / Bolton get relagated to Leauge one it will certainly be interesting to see what happens.

Fulham seem financially screwed the last time I saw figures banded about for them it was something like £200m of debt!

[Downside]

Top 3 are the biggest loss makers. Clearly not sustainable.

Chelsea and Man City are both owned by billionaires, few million pound loss is a drop in the ocean for them. Chelsea have been loss making since Abromovich took over.

[R K]

Chelsea and Man City are both owned by billionaires, few million pound loss is a drop in the ocean for them. Chelsea have been loss making since Abromovich took over.

Quite. Apart from the obvious fact that it's cheating, loss-making businesses are not sustainable no matter how deep your pockets are.

Since the takeover he's probably p1ssed close to £1bn up the wall. He's was down to around $5-6bn at one point. It will catch up with him eventually at that rate. Loss making clubs always do.

[rh2409]

I wrote this a while back, sums it all up, I think... Wayne Rooney, Shrek and how to earn £42,857 a day.

To me, football (besides being really boring and, like, totally gay) is a wonderful analogy for the state of the economy, i.e vast amounts of money being creamed off the top of an economic system that is already bankrupt. Look at Wayne Rooney. Wayne is remarkable for 4 things:

• 1. He is (people tell me) a very good footballer
• 2. He looks remarkably like Shrek.
• 3. He had very little hair and then, quite suddenly, had loads of the stuff.
• 4. Manchester United are now paying him £300,000 per week.

Lets just examine that £300k figure a moment. It’s equivalent o £15.6 million per year, or £42,857 per day. That compares to the UK national average daily wage which comes out at £73.86 per day. So Wayne earns as much in a day as 580.25 ordinary people. Is Wayne really worth £42,857/580.25 ordinary people?

Personally I’m not sure he, or anyone, is worth that kind of money. Okay, we live in a free market system (actually, it’s completely rigged, not free, but that’s another story..) and if you accept that you have to accept that some people will earn more than others. But surely a wage differential of £42,783 and 14 pee a day is pushing things just a teensy-weentsy bit too far? Could it not perhaps be perceived as being just a little bit unjust?….what do I know? It’s just a thought.

And before I go, let’s have a quick look at Man United, the financial powerhouse that can afford to pay one player nearly £16m a year. Man United was bought in 2005 by the Glazer family, they borrowed £525m to do it and then, in a deal which would delight the black heart of the slimiest of banksters, that debt was promptly dumped on to Man U’s books. Brilliant. Get the business to buy itself on your behalf! Perfick! As of June 2013 Man U’s debt mountain was £389 million. Since the 2005 take over the club has spent £605 million on debt servicing costs. Good economic fundamentals there, then.

Finally, Manchester United PLC, the commercial vehicle which owns the club, is so rooted in its community that it’s registered in….the Cayman Islands!

People tell me that I'm slightly Odd...

http://www.itsarandomworld.com

[Corruption]

Great to see these clubs paying the staff that make match day happen the minimum wage. Luckily the PFA is supporting the low paid workers by campaigning for change...

This bubble has plenty of room to inflate further. The problem for these clubs is when they get relegated, the debt immediately becomes unsustainable without promotion straight back. If Birmingham / Bolton get relagated to Leauge one it will certainly be interesting to see what happens.

Fulham seem financially screwed the last time I saw figures banded about for them it was something like £200m of debt!

They can build on Craven Cottage, in 2003 it was alleged to be worth 180 million, you could probably triple that if it was to go at current prices.

http://www.telegraph.co.uk/sport/2394875/Craven-Cottage-is-made-for-housing.html

I never know why these foreigners by small London clubs when there are far bigger teams in the North in the Championship without the debt and a far bigger fan base .. i.e. Leeds, Sheff Wed.

Edited May 2, 2014 by Corruption

[b w]

Lets just examine that £300k figure a moment. It’s equivalent o £15.6 million per year, or £42,857 per day. That compares to the UK national average daily wage which comes out at £73.86 per day. So Wayne earns as much in a day as 580.25 ordinary people. Is Wayne really worth £42,857/580.25 ordinary people?

Personally I’m not sure he, or anyone, is worth that kind of money. Okay, we live in a free market system (actually, it’s completely rigged, not free, but that’s another story..) and if you accept that you have to accept that some people will earn more than others. But surely a wage differential of £42,783 and 14 pee a day is pushing things just a teensy-weentsy bit too far? Could it not perhaps be perceived as being just a little bit unjust?….what do I know? It’s just a thought.

+1

[interestrateripoff]

They can build on Craven Cottage, in 2003 it was alleged to be worth 180 million, you could probably triple that if it was to go at current prices.

http://www.telegraph.co.uk/sport/2394875/Craven-Cottage-is-made-for-housing.html

I never know why these foreigners by small London clubs when there are far bigger teams in the North in the Championship without the debt and a far bigger fan base .. i.e. Leeds, Sheff Wed.

Although to be honest now the money isn't in the fans as such it's all TV revenue, which is probably why they like buying any club in London as it's more jam.

[TheCountOfNowhere]

Im surprised it's still going. I'[d expect the london mega bubble collapse will take down some clubs.

Sevco Scotland aka The rangers football club look in danger of heading the way the original club went, spanked £70M in 18 months or so and have no credit line....

[billybong]

I wrote this a while back, sums it all up, I think... Wayne Rooney, Shrek and how to earn £42,857 a day.

To me, football (besides being really boring and, like, totally gay) is a wonderful analogy for the state of the economy, i.e vast amounts of money being creamed off the top of an economic system that is already bankrupt. Look at Wayne Rooney. Wayne is remarkable for 4 things:

• 1. He is (people tell me) a very good footballer
• 2. He looks remarkably like Shrek.
• 3. He had very little hair and then, quite suddenly, had loads of the stuff.
• 4. Manchester United are now paying him £300,000 per week.

Lets just examine that £300k figure a moment. It’s equivalent o £15.6 million per year, or £42,857 per day. That compares to the UK national average daily wage which comes out at £73.86 per day. So Wayne earns as much in a day as 580.25 ordinary people. Is Wayne really worth £42,857/580.25 ordinary people?

Personally I’m not sure he, or anyone, is worth that kind of money. Okay, we live in a free market system (actually, it’s completely rigged, not free, but that’s another story..) and if you accept that you have to accept that some people will earn more than others. But surely a wage differential of £42,783 and 14 pee a day is pushing things just a teensy-weentsy bit too far? Could it not perhaps be perceived as being just a little bit unjust?….what do I know? It’s just a thought.

And before I go, let’s have a quick look at Man United, the financial powerhouse that can afford to pay one player nearly £16m a year. Man United was bought in 2005 by the Glazer family, they borrowed £525m to do it and then, in a deal which would delight the black heart of the slimiest of banksters, that debt was promptly dumped on to Man U’s books. Brilliant. Get the business to buy itself on your behalf! Perfick! As of June 2013 Man U’s debt mountain was £389 million. Since the 2005 take over the club has spent £605 million on debt servicing costs. Good economic fundamentals there, then.

Finally, Manchester United PLC, the commercial vehicle which owns the club, is so rooted in its community that it’s registered in….the Cayman Islands!

The whole premier league edifice is balanced on a knife edge. It only took one person to go from the pitch hut (Sir Ferguson) and the club's performance started to go all humdrum and mediocre.

All held together by oligarch's money, debt and TV fees. It's amazing that average workers some likely on zero hours contracts still keep forking out so much to sit and watch it.

Edited May 2, 2014 by billybong

[Fromage Frais]

They can build on Craven Cottage, in 2003 it was alleged to be worth 180 million, you could probably triple that if it was to go at current prices.

http://www.telegraph.co.uk/sport/2394875/Craven-Cottage-is-made-for-housing.html

I never know why these foreigners by small London clubs when there are far bigger teams in the North in the Championship without the debt and a far bigger fan base .. i.e. Leeds, Sheff Wed.

Its the possibility of becoming large and converting the hoards of global glory hunters to your brand.

To those investors its better to by a London team as a) London is cool and there are millions of people in London who can can be converted once your team becomes a contender (theoretically). c) Foreign glory hunters don't care buy Leyton Orient > get to premier league > buy Messi and within a few years you will see the shirts all over the place

When you buy a team as a foreigner how it plays back home is more important than the actual club itself.

[fluffy666]

Im surprised it's still going. I'[d expect the london mega bubble collapse will take down some clubs.

Sevco Scotland aka The rangers football club look in danger of heading the way the original club went, spanked £70M in 18 months or so and have no credit line....

It would be funny if Rangers went bankrupt just as they got back into the SPL.