 UEFA figures show football club losses have widened – but there’s more pain in store for the majority of teams
25 January 2012: Responding to figures showing that football club losses in Europe increased in 2010, Trevor Birch, a corporate recovery partner at PKF and member of the firm’s Football Industry Group, said:
"The revelation that losses across the European football industry have widened is disappointing but hardly surprising. However, the results are obviously skewed by the debt and losses generated by the high net worth owners at clubs such as Chelsea and Man City (and, in future years, PSG and Anzhi Makhachkala). These owner-funded models drive transfer fee and wage inflation in other clubs causing real pain in the sector, which will undoubtedly lead to further casualties across Europe. Our own survey of UK football club Finance Directors, conducted last summer, found that revenues remain under serious pressure and that clubs are only just starting to take meaningful steps to get their costs under control - several years later than most other British businesses."
"Ticket sales and merchandising income have been particularly badly hit as hard up fans cut back on their spending, and only a small number of top Premier League teams are able to negotiate favourable sponsorship revenues in an environment where businesses are demanding more for their investment."
"With little prospect of a meaningful economic recovery in the near future, clubs will have to continue to batten down the hatches for the foreseeable future – particularly with the UEFA Financial Fair Play rules and similar rules for Football League teams now very much on the horizon. The small number of top clubs with deep pockets and large fan bases can look to expand capacity at their stadiums and consider bolstering their overseas income streams. But for the majority, the priority will be to achieve the difficult balancing act of getting to grips with player related expenses - by trimming squad sizes, showing more restraint in the transfer windows and clamping down on excessive pay demands - whilst remaining competitive on the pitch."
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For further information, please contact: Andy Konieczko, 020 7065 0537, andrew.konieczko@uk.pkf.com
Notes to Editors:
1. PKF (UK) LLP is a leading firm of accountants and business advisers with more than 1,500 partners and staff operating in 23 offices in the UK mainland firm, incorporating a wholly-owned financial planning company and associated offshore practices. The firm specialises in advising growing and entrepreneurial/owner-managed businesses, AIM and fully listed companies, and also has extensive experience in the public and not-for-profit sectors. Principal services include assurance and advisory; taxation; consultancy; corporate recovery and insolvency; corporate finance and forensic. The firm has particular expertise in advising sectors such as hotels and leisure; mining and resource; public sector; real estate and construction; professional practices; not-for-profit; and medical. The firm’s web site is www.pkf.co.uk
2. PKF (UK) LLP also offers financial services through its FSA authorised company, PKF Financial Planning Limited. PKF (Isle of Man) LLC is a limited liability company registered in the Isle of Man. PKF (Channel Islands) Limited is incorporated in Guernsey.
3. PKF (UK) LLP is a member firm of the PKF International Limited (PKFI) network of legally independent member firms. The PKFI member firms have around 2,200 partners and more than 21,000 staff in around 125 countries.
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