Premier League players still ahead of the game as they receive over €2 billion in wages

Wage inflation ensured payments to top players rose 11 per cent in 2012-13

 A banner showing support for Ryan Giggs during the  Premier League match between Manchester United and Norwich City at Old Trafford. Manchester United  paid €87 million in interest and other finance costs in 2012-13.  Photo:  Laurence Griffiths/Getty

A banner showing support for Ryan Giggs during the Premier League match between Manchester United and Norwich City at Old Trafford. Manchester United paid €87 million in interest and other finance costs in 2012-13. Photo: Laurence Griffiths/Getty

 

Premier League

2.19 billion in 2012-13, up 11 per cent on the previous year, according to a review of all the clubs’ annual accounts.

Players earning multi-million pound salaries were again football’s clear financial winners, in a year when the clubs made a record €3.28 billion combined income, yet nevertheless made a loss overall, of €354 million.

Twelve of the 20 clubs made a loss in 2012-13, with five clubs losing €60 million or more: Aston Villa, Chelsea, Liverpool, Manchester City and QPR.

The figures are for the final year of the Premier League’s last, 2010-13 round of television deals, worth €4.26 billion, before the current massively increased deals, €6.70 billion from 2013-16.

They suggest that despite Uefa and the Premier League clubs themselves introducing financial fair play rules to discourage wage inflation, most clubs struggle to restrain spending on players as they compete with each other on the field, to succeed or avoid relegation.

Top clubs
The proportion of the income clubs spent on wages in 2012-13 was the same as in 2011-12, 67 per cent, above the 50-60 per cent threshold commonly recommended as sensible.

Because clubs earned more money overall, principally from increased sponsorship secured by the top clubs, that meant the total wage bill rose.

Clubs do not differentiate in their accounts between wages paid to players and to other staff, but the overwhelming majority unquestionably goes in galactic earnings of players.

Other staff have historically not been well paid at clubs, where there has been a culture of expecting people to consider it a privilege to work in football.

The organisation Citizens UK is campaigning for catering and other workers at Premier League clubs to be paid a living wage rather than the minimum wage, of €7.68 per hour, which its survey found many are on.

Only Manchester City, of the 20 current Premier League clubs, had responded by committing to paying a living wage, of €9.31 an hour, or €10.72 in London.

The clear exception to that culture of low pay, besides the players and managers, is in the boardroom, where senior executives are lavishly paid in the Premier League. The highest paid director in 2012-13 was Southampton’s executive chairman, Nicola Cortese, who earned €2.59 million. Next highest paid was Ivan Gazidis, who as Arsenal’s chief executive earned €2.22 million.

Salary packages of more than a million pounds went to the highest paid director at nine clubs altogether: Arsenal, Chelsea, Liverpool, Manchester United, Norwich City , Southampton, Tottenham Hotspur, West Bromwich Albion and West Ham United.

Despite the record income, earned from rights to live matches being sold exclusively to pay-television as they have throughout the Premier League’s existence, the sponsorships and historically very expensive ticket prices, clubs’ net debt increased in 2012-13, from €2.68 billion in 2011-12 to €2.92 billion.

A majority of Premier League clubs still rely on money from owners, whether paid in return for shares, like the vast €1.21 billion invested in Manchester City over just five years by Sheikh Mansour bin Zayed Al Nahyan of Abu Dhabi, or loaned, as at Liverpool, Newcastle United, West Ham United and others.

Roman Abramovich, the Russian oligarch, has funded Chelsea with €1.167 billion since 2003, loaned to his holding company, Fordstam Limited.

Record income
Football’s largest bank debt was owed by Manchester United, which is still paying heavily for the Glazer family’s 2005 takeover, for which the Glazers borrowed €639 million, then making United responsible for paying it off. United still owed €473 million in 2012-13, and paid €87 million in interest and other finance costs. That pushed the club into a €10.96 million loss, despite record income of €442 million.

That loss, however, puts United comfortably within Uefa’s €45 million permitted figure for financial fair play, and it is Mansour’s City, who lost €63 million, following €120 million in 2011-12, against whom Uefa are considering sanctions.

City have always maintained that Uefa’s exemptions, principally excluding salaries of players signed before the rules were introduced in 2010, will mean their finances comply, and that their €42 million a year shirt, stadium and training “campus” sponsorship by the Abu Dhabi airline Etihad is fair market value. They can be expected to argue strongly against any sanction from Uefa.

QPR’s wage bill, €95 million, was 128 per cent of the club’s entire income – and higher than that of Champions League finalists Atlético Madrid, whose 2012-13 wage bill was €66m.
Guardian Service

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