Deloitte issue wage warning 08/06/2010 |
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The future stability of Premier League clubs is under threat from spiralling wage costs, according to a report into football finances.
Deloitte, who carried out the research, claim Premier League clubs spent around 67% of their income on player wages during the 2008/9 campaign.
The soaring wage expenditure of England’s top clubs has grown by 55% or £474 million over the past three years with Chelsea leading the way on £167 million a year.
"For every £100 that comes into Premier League football clubs, £67 goes out on the wage bill - that's too high," Deloitte's Dan Jones told the BBC.
"The result is that profit margins are very thin or non-existent, and with the tightening of credit as well, that is really making that problem come into sharp focus now, and those debt levels start to pinch.
"The growth in wages is difficult to slow down, given existing three or four-year [player] contracts, but must nonetheless be reined back to address clubs' declining profitability.”
Meanwhile, only 10 of the 20 top clubs in the league made an operating profit in 2008/9.
Premier League profits fell by more than 50% to £79 million to hit their lowest level since 1999/2000.
Furthermore, England’s top flight clubs saw their net debt increased from £3.2 billion to £3.3 billion over a 12 month period during the 2008/9 season.
Meanwhile, Premier League operating profits fell by more than half to £79m, their lowest level since 1999/2000.
Deloitte also revealed that more than £1.9 billion of that net debt was caused by Arsenal, Chelsea, Liverpool and Manchester United.
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