Executive Summary

In 1996/1997, revenues from English and Scottish League football clubs were estimated by Key Note to total £724.8m, up from £622.1m in 1995/1996. Income is generated from a number of areas, including match receipts, sponsorship, broadcasting, corporate hospitality, catering, merchandising and publishing. In 1997, match receipts account for less than half of total revenues for most top clubs.

Since the 1980s, when football had a very poor image (mainly due to hooliganism and poor facilities), football has been transformed, with attendances on the increase and revenues soaring. The two main factors which changed the football scene in the 1990s were the Taylor report and the formation of the Premier League. The former triggered the transformation of stadia facilities, with millions being spent on new grounds or conversion to all-seater stadiums, and the latter resulted in the top division becoming a more marketing-led organisation, with huge increases in revenues from TV and sponsorship.

Within this picture of a booming football industry, there is a downside, with clubs in the lower divisions not getting anywhere near the amounts of revenue earned by Premier League clubs and the traditional flow of transfer money drying up. In England, the largest club by some distance is Manchester United, followed by Newcastle United, Liverpool, Tottenham Hotspur and Arsenal. Manchester United's dominance was illustrated by its results to 31st January 1997, which produced a turnover of £50.1m. In Scotland, the League is dominated by the `Old Firm' of Rangers and Celtic, with the combined turnover of the two being greater than all the other Scottish clubs combined.

The current issues affecting the game include: the `Bosman Ruling' and its likely consequences on the transfer market and wages; the flotation of clubs on the Stock Exchange; the financial difficulties being experienced by lower division clubs and the new £670m BSkyB TV deal with the Premier League.

In 1997/1998, revenues in the Premier League will soar due to the new BSkyB TV deal, as well as further growth in commercial activities as stadium redevelopments are completed. By 1998/1999, revenues will be over £1bn, and in the longer term, further growth will be determined by any restructuring of the game, in terms of the formation of a European Super League and the start of pay-per-view (PPV) TV for football matches.

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