What credit crunch? Football clubs set to go on defying the downturn

LUCRATIVE broadcast deals have fuelled huge revenue increases in the Premier League as football continues to prove resistant to the economic downturn, according to a report published today.<br /><br />Total revenue for the 20 top flight clubs rose 26 per cent to &pound;1.9bn for the 2007-08 season. That figure is expected to reach &pound;2bn for the campaign just finished, and the increase is projected to continue, albeit at a slower pace.<br /><br />Growth has been driven by the most recent domestic and overseas broadcast deals, which took effect in 2007 and are worth &pound;2.7bn in total over three seasons.<br /><br />The boost also saw the Premier League cement its position as the richest in Europe, according to the Annual Review of Football Finance, compiled by Deloitte&rsquo;s Sports Business Group. Total revenue was some &pound;800m more than its nearest rivals &ndash; Italy, Spain and Germany &ndash; while England&rsquo;s top tier was once again the most profitable league, with clubs making record operating profits of &pound;185m.<br /><br />Premier League clubs have not found it hard to spend their surging income, splashing &pound;1.2bn on wages, 23 per cent more than in 2006-07 &ndash; the largest year-on-year increase in the Premier League era.<br /><br />Transfer activity has also escalated as revenue has risen, with record amounts spent both last summer and in January &ndash; an estimated &pound;675m over both transfer windows.<br /><br />Despite soaring wages, clubs slightly improved their wages-to-revenue ratio &ndash; a key measure of financial health &ndash; which fell from 63 per cent in 2006-07 to 62 per cent.<br /><br />Debt continued to stalk top-flight clubs, with net debt up from &pound;2.7bn to &pound;3.1bn. However, around two-thirds of that figure belonged to the top four of Manchester United, Liverpool, Chelsea and Arsenal, and &pound;1.2bn is in non-interest bearing so-called &lsquo;soft loans&rsquo;.