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< ><STRONG>Club profitability</STRONG></P>
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<DIV>In 2003/04 England’s top 92 professional clubs generated total revenue of £1,766m, up 7% from 2002/03.</DIV>
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<DIV>The total revenue of Premiership clubs was £1,326m, up 6% on 2002/03 (£1,246m) – the lowest rate of growth since the Premiership’s formation, but still comfortably maintaining the league’s position as the ‘World champions’ in terms of revenue generation.</DIV>
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<DIV>Overall, Football League clubs’ revenue increased by 7% to £440m for 2003/04, with total attendances across the three divisions also up 7% to 15.9m.</DIV>
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<DIV> remiership clubs’ revenue growth was driven by broadcasting and matchday revenue. The last (stepped) year of the 2001/02 to 2003/04 BSkyB domestic TV deal contributed to increased broadcasting revenues of £593m – up 9% from 2002/03. Broadcasting remains the largest revenue source at 45% of total revenue and, given its ‘100% profit margin’ status, is arguably the most important.</DIV>
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<DIV> remiership matchday revenues grew impressively by 9% to £395m (from £363m in 2002/03) despite average league attendances falling by 1% to 35,008. Thus increased ticket yields were the key driver of higher revenues.</DIV>
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<DIV>Manchester United headed the Premiership revenue league table (and Deloitte’s global Football Money League) at £172m, followed by Chelsea (£144m and fourth globally) who had substantially narrowed the gap, then Arsenal (£114m and sixth globally).</DIV>
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<DIV> remiership clubs reported overall operating profits of £149m – another record high (up £25m on the previous record) since the formation of the Premier League and a healthy 11% margin. Only four clubs made losses at the operating level.</DIV>
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<DIV>The reduction in domestic broadcasting revenues in 2004/05 presents a new challenge to the Premiership clubs and has led us to predict a modest, but temporary, reduction in total estimated revenues for 2004/05. Continuation of the improved cost control at many clubs should enable them to adjust relatively painlessly to any revenue shortfalls.<BR>l Pre-tax losses (i.e. after player transfer costs) also reduced from £153m to £128m and, excluding Chelsea, improved by £86m. Ten Premiership clubs returned a pre-tax profit (five in 2002/03).</DIV>
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<DIV>The revenue gap between the ‘big five’ and the remaining Premiership clubs has stayed steady in relative terms over the last five years, but has increased in absolute terms from £44m in 1999/2000 to £74m in 2003/04.<BR>l In 2003/04, the average Premiership club generated revenue of £66m, compared to £12m for a Championship club (a gap of £54m, compared to £52m in 2002/03).</DIV>
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<DIV>The battle for the title of ‘the richest game on earth’ – a contest between the Football League Championship Play-off Final and the chase for the UEFA Champions League fourth qualifying spot – has narrowed; but, at a minimum of £35m versus an average £19m respectively, the Championship Play-off Final remains firmly on top. </DIV>
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<DIV>Manchester United was again, by far, the most profitable club at an operating level. Their operating profit of £51.7m was not only the first time any club in the world broke the £50m barrier, but increased again their Premiership record (previously £47.8m in 2002/03). Given the new broadcasting deal for 2004/05 and the club’s interim results and on-field performance, it is unlikely this record will be bettered in 2004/05.</DIV></LI></UL> |