By Ian Grant
The latest set of figures from the annual Deloitte survey on Football Finances represent the Premiership as a bloated 60 year old businessman at a table gorging on steak at a fine set of annual results, casting a blatant blind eye to the warning signs.
One of the key signs is that the average Premiership attendance was down in the period 2003-2004 to 35,008. The report estimates that a similar situation in 2004-05 means that around 800,000 seats were unused and £24m in income was lost.
Another sign is that money is leaching out of the UK and to agents. Deloitte estimates that a third of the £263m spent on foreign players and to agents came from Stamford Bridge.
But the Premiership will latch on to the fact that the English top flight earned £1.3bn of revenue in 2003-04 – the biggest in Europe by a record margin. It represents 18% of the total £7.5bn European football market. Premiership clubs also recorded significantly higher operating profits than their European counterparts.
Proponents of some sort of transfer and wage ceiling will look at the Football League (Old Division Two) – a much more equitable league – where you can still call it sport, with the twin elements of competitiveness and uncertainty, and point to attendances reaching a 40-year high.
One ironic statistic is that West Ham earned more through winning the Championship play off – £35m, than Liverpool did in winning the Champions League – £30m. Although as Tom Cannon of the Kingston Business School says, it depends how Liverpool use the platform of being European Champions.
Arsenal haven’t been mentioned much in the coverage. However they are third in the operating profits league on £20.1m, with Newcastle on £21.2 and Man U on £51.7m.
Their wages to turnover ratio is 61% – fairly healthy. Chelsea’s is 80% – at £115m in salaries, £45m more than Arsenal.
However Professor Tom Cannon of the Kingston Business School, somewhat insultingly to Arsenal and the other clubs, said the most important question for the Premiership in the next five years is whether Glazer can catch Abramovich.
Dan Jones, partner in the sports business group at Deloitte said: “We estimate Mr Abramovich’s investment now totals [around] £300m [for the season in question]. Other clubs are not trying to compete in an unwinnable financial contest. That makes sense.”
Graham Kelly was on TV this week, over the Tottenham/Chelsea spat, saying points deduction was the only thing that would count. But what he fails to consider is that money buys points. Chelsea after the £600m investment in two years (including transfers over two seasons, two sets of annual salaries and initial buying costs) are 28 points better off over the period. So taking off what it cost Chelsea to reach the 2002/3 points total, Abramovich effectively has spent £18.75m for each point gained.
To put that into perspective the total annual wage bills for Charlton, Middlesbrough, Southampton, Portsmouth, Bolton, Birmingham in 2003/4 were between £23m-£29m.
The league will only survive if the the authorities intervene and ensure games are competitive with their outcomes uncertain.