Germany 1 England 0

The Bundesliga recorded a £146m profit as revenue increased by £116m and wages went up by just £68m, according to Deloitte’s Annual Review of Football Finance.

The German first division also recorded the highest attendances in Europe for the seventh successive season – attracting 8,000 more people per game than the Premier League.

The Premier League remains by far the biggest division in terms of generating revenue, which actually increased by £49m, but this was swallowed up by a £132m increase in wages.

English top flight clubs spent in excess of £1.32billion on employee salaries – more than Italy’s Serie A (£0.93bn), Spain’s La Liga (£800m), the Bundesliga (£684m) and France’s Lique 1 (£615m).

The average Premier League footballer earned an estimated £21,600 a week or £1.1m a year in 2008-09 as top flight clubs each spent an average of £41m on player wages.

To compare, the average player in the Championship earned around a quarter of this: £275,000 a year or £5,300 a week.

Only Arsenal, Liverpool, Manchester United and the three clubs promoted at the start of the 2008-09 season – West Bromwich Albion, Stoke City and Hull City, who all had much lower wage bills – made a profit. The other 14 Premier League clubs recorded combined losses of £117m.

Deloitte suggest clubs spend around 55 percent of their revenue on wages to achieve ‘effective cost management’ but, on average, Premier League sides spent 67 percent.

This was a record high and an increase of five percent from the previous year, although it is still lower than Serie A (73 percent) and Lique 1 (69 percent).

Yet only Arsenal (46 percent) and Manchester United (44 percent) managed to meet Deloitte’s recommendations in 2008-09, with nine clubs spending more than 70 percent of their revenue on wages – a ratio regarded as a ‘warning level’.

It will come as no surprise that Portsmouth, who finished 14th in 2008-09 but were forced into administration and relegated last season, were the only Premier League side to spend more in wages than they made in revenue. The club’ s wage bill accounted for 109 percent of their revenue.

But the warning signs were there the season before, in which Harry Redknapp’s Portsmouth won the FA Cup, as the club spent 76 percent of revenue on wages.

Dan Jones, a partner in Deloitte’s Sport Business Group, said: ‘In 1995 we commented that “we believe controlling the wage bill is, long term, football’s biggest challenge” and this year’s figures illustrate the extent to which that challenge is becoming a real threat.’

Under UEFA’s new financial fair play rules, clubs will be expected to break even over a rolling three-year period if they want to play in the Champions League or Europa League.

But the growth in wages is difficult to slow down because players have signed three- or four-year contracts. The Deloitte report suggests that performance-related pay could be the way to address the problem.

‘Clubs should learn valuable lessons from the best of the corporate world,’ it says, ‘where basic pay is set at affordable levels, with bonuses built into contracts only if performance (and profit) allows it.

‘Wages should be structured so they flex automatically for meaningful success, not just appearances, rather than trigger a financial crisis.’

Source: Deloitte’s Annual Review of Football Finance

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