LONDON — Manchester United, Liverpool, Chelsea and Arsenal are responsible for about two thirds of a 3.1-billion-pound (C$5.5-billion) debt run up by England's Premier League clubs, according to an independent report released Thursday.
Business advisory firm Deloitte's annual report for the 2007-08 European season suggested that England's so-called "Big Four" clubs, which have all qualified for the lucrative Champions League the past four years, were 400 million pounds (C$708.7 million) further in debt than a year earlier.
Manchester United and Liverpool are hampered by debt and subsequent interest incurred during their takeovers by American owners. Chelsea is owned by Russian businessman Roman Abramovich and Arsenal borrowed heavily to build its Emirates Stadium.
Deloitte said none of the elite four were threatened by their debt, although efforts to trim it with increased revenue from a new broadcast agreement that came into force for the 2007-08 season were hampered by almost all the extra money going on players' salaries.
The report showed that Premier League clubs had received a total increase of 351 million pounds (C$621.7 million) in broadcast revenue over the past two years - and handed over 212 million pounds (C$375.4 million) of it in wages.
Salaries in the Premier League went up by a record 23 per cent to a total 1.2 billion pounds (C$2.12 billion) for the 2007-08 season, again making it by far the best-paying league in world football.
A big increase in revenue meant that, despite the British pound's depreciation, Premier League clubs were able to pay on average 27 million euros (C$42 million) more than Italy's Serie A clubs and 31 million euros (C$48 million) more than Spain's Primera Liga sides.
"Despite revenues having grown so strongly, improved profitability has remained stubbornly elusive," Dan Jones, a partner of Deloitte's Sports Business Group, said. "The fiercely competitive nature of the league has seen potential profits quickly competed away.
"For many owners, Premier League clubs represent trophy assets with the potential to deliver a long-term return, but which at best break even annually, rather than a cash cow delivering an ongoing dividend."
That is what Mike Ashley was hoping when he bought Newcastle two years ago, only to see the club's value diminish dramatically with relegation last month.
Despite the economic downturn, TV income helped push overall revenue for the Premier League clubs up 26 per cent to 1.93 billion pounds (C$3.42 billion).
Deloitte expects that clubs' reluctance to increase the price of match tickets for fear of alienating fans will slow the rise in revenue in next year's report.
Eleven of England's 20 Premier League clubs made an operating profit before tax, player transfers and other costs are taken into account.
That was three more than a year earlier, but still fewer than the Premier League's inaugural season in 1992-93 - when 15 of 22 clubs recorded an operating profit.
Tottenham had the lowest wages-to-revenue ratio at 46 per cent, with eventual champion Manchester United next at 47 per cent.
Chelsea and Wigan had the highest at 81 and 88 per cent respectively, with Chelsea paying a league-high total 172 million pounds (C$304.7 million) - 51 million pounds (C$90.3 million) more than Manchester United, which was the next highest payer.
