By Mark Baber
February 5 – Player wages have jumped by a massive 38% over the past five years, according to the UEFA European Club Licensing Benchmarking Report, more than absorbing the increase of 24% in revenues for clubs over the period.
Player wages remain the biggest single challenge for clubs.
Clubs competing in the 2012/13 UEFA club competitions reported aggregate employee costs of just under €5bn, equivalent to €21.2m per club and 64% of reported revenues. A Europe-wide analysis shows a similar ratio of 65%.
The rapid increase in wages, with overall employee costs increasing by 38% between 2007 and 2011 has pushed the key cost ratio of wages to revenue up from 59% to 65%.
The combined employee and net transfer costs to revenue ratio, has increased from 62% to 71% during this period.
What this means is that the previously documented €2.6bn revenue increases between 2007 and 2011 have not been enough to cover the €2.8bn increase in combined employee and transfer costs, with a €200m shortfall, and this is before adding the €1bn increase in other operating and financing costs during the period.
While European clubs have successfully increased their revenues by 24%, the cost base of football clubs has increased at a faster rate, with employee and net transfer costs, in particular growing fast.
Wages have increased by 38% from €6.2bn to almost €8.6bn, and if the net costs of wages and transfers are combined, then the increase in these costs was 43%.
The majority of countries had at least one club reporting an employee cost ratio above 100%, with 88 clubs in total (78 in 2010) reporting this clearly unsustainable level.
The share of total employee costs attributable to players was 81%, indicating that their costs were €6.9bn in2011, an increase of €330m compared with 2010.
Meanwhile, players involved in the biggest 50 summer transfers of 2012 had an average contract length of 4.3 years with 52% having contracts into at least the 2017 calendar year.
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