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Viewing report
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Football Clubs and Finance Market Report 2005
Key Note Publications Ltd, June 2005
Revenue from English and Scottish League football clubs amounted to £1.94bn for the 2003/2004 season. This represents a 5.2% rise from the previous year and a 9.3% rise over the year before that.
Income for UK football is generated from a number of areas. These include match receipts, corporate hospitality, broadcasting, sponsorship, merchandising, online services and publishing. Of these, the broadcast sector has provided the largest leaps in revenue for England's top clubs.
Broadcast earnings for UK clubs from all sources increased by 3,520% between the launch of the Premier League in 1992 and 2003. However, in 2003, the Premier League signed an exclusive 3-year deal with BSkyB, which led to a small decrease in broadcast revenue for live rights.
The deal attracted the scrutiny of the European Commission, which suggested that more live matches should be made available to consumers on multiple broadcast platforms. This resulted in a compromise agreement in which BSkyB agreed to sublicense some rights to another broadcaster for the 2005/2006 season. The League also agreed that, in future deals, live rights must be obtained by more than one broadcaster.
The erosion of exclusivity arrangements threatens the value of future broadcast deals. However, UK football clubs are not as heavily reliant on broadcast income as some of their continental counterparts. In terms of match attendance, the Premier League operated at close to capacity across the 2003/2004 season, while aggregate attendances in the Football League are at their highest level since the 1963/1964 season.
BMRB Access consumer research commissioned for this report also indicates that the profile of fans attending football games may be changing. The upgrading of UK stadia and the glamour of the Premier League seem to be attracting more ticket-holders from the AB social grade. There has also been an increase in the number of corporate hospitality guests.
In 2002, we reported that the financial stability of football in England and Scotland was under threat, partly as a result of failures to exert control on player transfers and wages. In 2005, fiscal discipline has become key to the management of UK football clubs. Far fewer clubs entered into administration during the 2003/2004 season than in previous years, and although revenue growth has slowed across the leagues, the UK industry is well placed to maintain its status as the most commercially successful in the world.
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