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11% rise in Premier League wages sparks concern

It was a tough season for Portsmouth © Getty Images

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An annual report of football finance has shown that Premier League wages have risen 11% to a total of £1.3 billion.

With Portsmouth entering administration last season and fears over the financial future of many top clubs, there is genuine concern as the 20 teams last season spent, on average, 67% of their turnover on wages.

The report, by business analysts Deloitte, shows that clubs spent £132 million more in 2009-10 than in 2008-09.

As UEFA is bringing in new legislation from 2012 that demands clubs in European competition can only spend what they earn in revenue, English clubs need to change how they spend their money.

Dan Jones, director of Deloitte's Sport Business Group, said: "The wages increase is definitely something people should be concerned about, and that will be even more the case when the UEFA initiatives are in full swing. This report clearly shows there is an issue there to be dealt with. The revenue story is still very positive and has proved resilient to the recession but the clubs have to get costs under control."

The report shows that the most rapid inflation in Premier League wages has been in the group of 13 clubs outside of the 'big four' - Arsenal, Chelsea, Liverpool and Manchester United - and the three newly-promoted clubs.

The report states: "A model of profit maximisation is now pursued by a very limited number of clubs and, whilst some clubs seek to break even on a consistent basis, the emerging norm for many Premier League and Championship clubs appears to require significant ongoing benefactor support.

"As such we appear to be seeing a continuing shift from a sustainable 'not for profit' model towards one with potentially calamitous consistent and significant loss-making characteristics."

Jones has said, however, that the gap between rich and poor in the Premier League is not as pronounced as it is in other top leagues including La Liga.

"The Premier League is fairly even in that sense and that should get even more so in relative terms because the next big increase in television money is in overseas TV rights and that is split evenly between the 20," he said. "In Spain, the gap between Barcelona and Real Madrid and the rest is vast and not getting any smaller and that can't be great for their league in the long term."

The report suggests there could be major problems in the English Championship, though, as annual operating losses have trebled in four years. Crystal Palace have recently made headlines with their battle for survival.

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