Thursday, 26 March 2015

Changing the rules of football. Slightly.

From City AM:

England's leading football clubs have left their loss-making ways behind and entered a new era of profitability after mustering record-breaking pre-tax profits last season...

The profit was the result of a 29 per cent rise in revenues across the division to £3.3bn, driven by booming broadcast contracts and commercial growth, allied to the impact of cost-control measures such as the financial fair play (FFP) rules initiated by European body Uefa.

Clubs’ return to profitability heralds the end of the so-called prune juice effect, which repeatedly saw uplifts in television rights income largely swallowed up by instant wage inflation. Player salary costs rose just six per cent in 2013-14, while the Pre­mier League’s wages-to-turnover ratio – a key indicator of financial health among clubs – fell from a record high of 71 per cent in 2012-13 to 58 per cent*, its lowest level since last century.

It appears that the football clubs have finally worked out how to prevent any increase in revenues going straight into higher players' wages, so well done them!

* To cut a long story short, out of the £800 million extra revenues, they spent 'only' £100 million on higher salaries and an extra £200 million on other stuff, meaning that last year's overall pre-tax loss of £300 million turned into a very slim net profit of £200 million.


Lola said...

The rules are here

I have not read them since as I am regulated by the Financial Catastrophe Authority I have zero motivation to read even more screeds of bureaucracy..

Mark Wadsworth said...

L, thanks, good link.