Sunday, June 23, 2013
Premier League 2011/12 - Some Girls Are Bigger Than Others
Although I have previously posted a summary of the 2011/12 Premier League finances on Twitter, I have received numerous requests to include them in a blog post, so that people can refer back to them, so that's what I am going to do here.
No further analysis, just figures and graphs - well, they do say that a picture paints a thousand words.
All these figures have been taken from the clubs' published accounts, though I have made a couple of presentational adjustments in order to prepare like-for-like comparisons between clubs, e.g. they do not all use the same revenue classification. In this way, I have had to use estimates for QPR and Swansea City, who do not provide a full analysis of their revenue (the total figures are unchanged). Similarly, I have taken the Deloitte Money League revenue split for Manchester City, as the club accounts include some match day income in commercial.
Furthermore, Liverpool moved their accounting date in 2011/12, so their year only covered 10 months. In their case, I have taken annual revenue figures from Deloitte for any revenue comparisons, while I have annualised their wage figures.
Obviously, these figures are now out-of-date, but 2011/12 is the last year in which all Premier League clubs have published their accounts, so that is all we can use at the moment. In addition, Premier League clubs' finances will be significantly impacted by the new TV deal, which kicks off in the 2013/14 season, boosting clubs' revenue by £20-35 million a season, depending on where they finish in the league table.
Nor do these figures include the impact of lucrative new sponsorship deals, such as Manchester United's Chevrolet shirt sponsorship, Arsenal's Emirates/Puma deals or Chelsea's Adidas kit deal.
So, it is what it is. Hopefully, it still provides a useful aide-mémoire for people.
An overview (in alphabetical order) of the club's profit and loss accounts. In this section, Liverpool's figures are as published, thus only covering 10 months, due to the change in accounting date.
Profit/(Loss) before Tax
Almost half of the Premier League clubs (9 out of 20) reported profits in 2011/12 with Arsenal making the most money at £37 million.
Profit/(Loss) after Tax
A similar story for profit/losses after tax, though Manchester United benefited from £28 million of tax credits, while Arsenal's £7 million tax bill brought their net profit down to £30 million.
A wide range of revenues in England's top flight with six clubs earning more than £100 million a season: Manchester United £320 million, Chelsea £258 million, Arsenal £235 million, Manchester City £231 million, Liverpool £189 million and Tottenham £144 million.
Match Day Revenue
Some big differences in match day revenue with Manchester United generating £99 million a season, compared to Wigan's £4 million.
Premier League TV money is distributed on a fairly egalitarian basis with the top club only receiving around 1.5 times as much as the bottom club: Manchester City £60.6 million, Wolverhampton Wanderers £39.1 million. However, the importance of Champions League revenue is clear to see with the four English clubs earning between £23 million and £48 million from Europe's flagship competition.
Reliance on TV Money
Even before the new TV deal commences, 6 clubs relied on TV for over 70% of their total revenue with Wigan "leading the way" at nearly 88%.
This is a fast-growing category, especially for the leading clubs, as revenue generation becomes ever more important in the era of Financial Fair Play. Manchester dominates here with United earning £118 million and City £112 million.
Profit on Player Sales
Following the sales of Cesc Fabregas to Barcelona and Samir Nasri to Manchester City, Arsenal made by far the highest profits on player sales at £65 million. In fact, without these profits, the club would have reported an accounting loss.
Five clubs had wage bills above £100 million: Manchester City £202 million, Chelsea £176 million, Manchester United £162 million, Arsenal £143 million and Liverpool £131 million.
Note - I have made a couple of adjustments to the published figures here: (a) I have added back the £4.7 million exceptional credit to Chelsea's £171.0 million staff costs (per note 4 in the accounts); (b) for Liverpool, I have taken the £109.2 million from note 4 of the accounts (Administrative expenses) as opposed to the £118.7 million included in note 6 (Directors and employees), because the latter figure includes exceptional costs (staff termination payments) and then annualised it.
Wages to Turnover
The best (lowest) ratios come from two promoted clubs (Norwich City 49%, Swansea City 53%) and two more established clubs (Manchester United 50%, Arsenal 61%). The 4 clubs with the worst ratios are Blackburn Rovers 92&, QPR 91%, Manchester City 87% and Aston Villa 87%.
Manchester City and Chelsea have the highest other expenses, mainly due to player amortisation (the annual charge for writing-off a player's purchase price), which was £83 million and £50 million respectively.
Manchester United £437 million and Arsenal £253 million have by far highest gross debt, the former as a result of the Glazers' leveraged takeover, the latter due to funding the construction of the Emirates stadium. Other clubs with high debt include Bolton Wanderers £137 million, Newcastle United £129 million and Aston Villa £122 million.
Note: Chelsea's net funds figure is taken from the football club's accounts. Some £895 million of loans still exist in the holding company. They are interest free, but are repayable with 18 months notice. It must be considered unlikely that Abramovich would ever call in this debt, but it is theoretically possible.
Arsenal look better on net debt, after significant cash balances are taken into consideration, leaving Manchester United out on their own with £366 million.
Net Interest Payable
Manchester United's £50 million annual net interest stands out here, being nearly four times as much as the next club (Arsenal with 13 million). Interest actually paid is not necessarily equal to the interest payable figure in the profit and loss account, as it is sometimes accrued (so not paid), but both these clubs made cash payments of a similar size in 2011/12.
Arsenal have easily the highest cash balances with £154 million, over twice as much as Manchester United £71 million. The next highest balances are even lower: Chelsea £17 million, Norwich City £17 million and Tottenham £16 million.
For the sake of completeness, I have included average attendances, though most clubs do not formally publish these figures in their accounts. Instead, I have taken these numbers from the good folk at Soccerway.
So, there we have it, a financial overview of the Premier League in the 2011/12 season. At the risk of stating the obvious, they're only numbers: if one club has higher revenue than another club, it does not mean that they're "better" - just that they earn more money and (probably) have more spending capacity. To put this another way, let's quote The Smiths, "some girls are bigger than others, some girls' mothers are bigger than other girls' mothers."