Premiership clubs top of Europe's financial tree

The madhouse economics of English football were highlighted again yesterday as the Premier League said it was "very pleased" that an annual financial review had labelled its 20 clubs "the financial champions of Europe". This comes when interim results for England's top-flight clubs in 2002-03 show an average £3.3m pre-tax loss.

The review, produced by the accountants Deloitte & Touche, considers the 2001-02 season, however, during which total Premier League revenue was up 21 per cent to £1.1bn on the previous year. That figure, which exceeded the income of the top divisions in France and Germany combined, kept the English élite well ahead in the European earnings stakes.

Yesterday's report shows that the wealth gap between the Premier League and the Football League continues to grow. The 72 clubs in the Football League earned £467m combined in 2001-02. Although this represented a growth of 41 per cent, the average top-flight club still earns four times as much as the average First Division club.

Salaries paid by Premier League clubs rose 26 per cent in 2001-02. Manchester United spent the most on wages, paying £69.9m. Arsenal were next (£61.4m) followed by Liverpool (£56.1m), Chelsea (£53.6m) and Leeds (£53.6m). The latter two clubs ended the review period with some of the highest debts English football has seen.

Leeds were £92.6m in the red, Fulham £91.9m and Chelsea £73.9m. They and such financial basket cases as Ipswich Town, Leicester City, Derby County and Sunderland, were all in a top division in 2001-02 crowned as the continent's financial champions.

The review of 2001-02 did show the average pre-tax operating profit (before transfers) at Premier League clubs was £0.7m. Although this is on course to be an average £3.3m loss when the next figures come out, a Premier League spokesman said: "The increase in revenue, profits, attendances and investment in stadium facilities is good news for the game.

"The decrease in transfer activity shows an increased level of financial prudence while many clubs, the report suggests, are developing wage structures which can adjust to the prospect of relegation ensuring greater stability."

It is not known whether the spokesman has met the billionaire Chelsea owner, Roman Abramovich, who has recently been offering transfer fees of £70m-plus and reported £150,000 per week salaries.

The Football League's future, according to the report, seems less rocky than recent seasons might suggests. Salary rises in the lower divisions had slowed to seven per cent in 2001-02. Only two clubs, Coventry and Wigan, spent more than 100 per cent of turnover on wages compared to 16 clubs the previous year.

The Football League's spokesman, John Nagle, pointed out, however, that 2001-02 was the year before ITV Digital reneged on their television deal and that the picture is not so rosy for many clubs. "This was something of a blip year but it is the case that clubs are getting costs under control."

THE MONEY GAME: TOP CLUBS CASH IN BUT SPEND MOST ON WAGES

The Premier League continues to be the wealthiest, most profitable league. It is pulling away from its European rivals. Total revenue was up 21per cent to £1.132bn, more than France and Germany combined.

The Premier League had the highest wage rise in Europe (26 per cent) and wage growth rate increased.

Football League salary rises slowed to 7 per cent. Coventry and Wigan, spent more than 100 per cent of turnover on wages compared to 16 clubs the previous year.

Interim results for Premiership clubs in 2002-03 show an average pre-tax loss of £3.3m compared to £0.7m profit for 2001-02. Operating profits (excluding transfer income) slightly up to average £1m.

Transfer spending in England was £407m, £323m by Premier League clubs. The total on wages and transfers for 1995-2002 inclusive was £4bn. A fall of up to 50 per cent for 2002-03 is predicted.

The average Premier League club has more than four times more income than the average First Division club, and it is expected to rise to six times more in 2002-03.

Biggest net spenders on transfers in the six seasons to 2002: Man Utd (£99m), Leeds (£91m), Chelsea (£84m), Liverpool (£81m) and Tottenham (£53m). Arsenal's net spending was £24m, less than Manchester City's.

Man Utd and Arsenal were the only Premiership clubs whose operating profits were more than net transfer spending.