More than two thirds of the Premier League’s record £2.4bn income in 2011-12 was paid out in wages, according to the most recently published accounts of all 20 clubs. The Guardian’s annual special report of Premier League clubs’ finances shows they spent £1.6bn on wages last season, most of it to players.
The wage bill accounted for 67% of clubs’ turnover, a similar level to the two previous years – wages were 68% of income in 2009-10, and 69% in 2010-11.
The £1.6bn for 2011-12 follows £1.5bn in 2010-11, and £1.4bn in 2009-10, meaning that over the past three years Premier League clubs have spent £4.5bn on wages alone. That figure does not include money paid to agents, which was an additional £77m between October 2011 and September 2012.
However, the accounts show clubs are generally becoming better run financially than in previous years. In 2009-10 the 20 Premier League clubs made an overall loss of £484m. In 2010-11 that figure had fallen to £361m. In 2011-12, 12 of the 20 clubs made losses, but the overall figure was down to £205m. This was, though, largely accounted for by Manchester City, who reduced their record loss of £197m in 2011 to £99m last year. Manchester United carry a debt of £420m, on which they paid £50m interest. Overall net debt owed by the 20 clubs was £2.4bn, much of it owed to owners who invested in the clubs.
The clubs do not separate the wage bill in their annual accounts between players, senior employees and other staff, but it is beyond doubt that players account for the bulk of their spending.
At £202m City’s wage bill, fuelled by the cash injection from the club’s owner, Sheikh Mansour of Abu Dhabi, was the Premier League’s highest, almost £30m more than the £173m paid by Roman Abramovich’s Chelsea. City cite that sum as the total paid to all 476 staff employed by the club – but with Carlos Tevez paid £198,000 a week, it is clear that the players receive the lion’s share.
Of other Premier League club employees, chief executives are now extremely well paid compared to companies with a similar turnover. The £2.6m earned by Manchester United’s best paid director, believed to be David Gill, was the league’s highest.
However, other employees, in catering, shop work and other contracted-out jobs, can still be paid the minimum wage. In 2008 a survey by the Fair Pay Network found Premier League clubs were paying cleaners, programme sellers and warehouse staff £5.52 per hour, and the mayor of London, Boris Johnson, urged the London clubs to increase that to a “living wage”. That has not, however, become Premier League policy. Last week several clubs, including Reading and Swansea City, were criticised for advertising to hire well-qualified graduates, requiring a degree or masters in science, to work – unpaid – on player performance analysis.
Unlike other staff, players’ wages have increased since 1992 in tandem with the growth in television income and the rise in ticket prices. The huge sums paid out lie behind the clubs’ decision to limit wage increases when the next TV deal – a projected record £5.5bn – begins in 2013-16.
Financial fair play regulations will require clubs to limit losses to £35m a year if backed by an owner’s money, and £5m if not. Clubs have also agreed that of the increase in TV money, around £20m per club, just £4m can be spent on increasing players’ wages next season, rising to £8m in 2014-15 and £12m in 2015-16.
It remains to be seen what clubs will do with the money they save from players’ wages. The Premier League distributed just £12m to the Football Foundation last year. That was just 0.5% of clubs’ income, despite the Premier League having pledged to distribute 5% of its total revenue to grassroots football.
Discussions are continuing about how the Premier League clubs will hand out 8.75% of their £1.26bn income but it is not anticipated that they will offer any more money or increase the percentage they distribute to tPPhe wider game.