English clubs must push for a European Super League with a wage cap to prevent financial calamity.
A new report reveals that the top seven clubs in the Premier League have lost £1.1billion over the last seven years despite being awash with television cash.
The current broadcasting deal has been trebled the cash coming into the game but according to Roger Bell of Vysyble the money is flowing out even quicker.
Should BT or Sky start to question the money that they are pouring into the game it could trigger an incredible collapse with clubs committed to long term player contracts but without the means to fund those deals.
International broadcasting rights is also a big earner but Bell believes that the big hitters are starting to get edgy about their rising costs and dependence on broadcasting revenues.
The Sun reports Bell saying: “The money from TV is critical to the clubs in terms of funding player purchases and contracts, but wage costs are rising faster than revenues.
“Despite rising revenues from TV and sponsorship, the top seven EPL clubs still struggle to make real money.
“Using a measure known as Economic Profit – which has been used by Coca-Cola, Gillette, Lloyds Bank, etcetera, where all taxes and charges are subtracted from the revenue number to give a true reflection of money made or lost – the top seven EPL clubs have destroyed £1.1billion over the last seven years despite rising revenues via TV rights deals.
“Our analysis shows that in the current framework there is only a one in five chance that any of the top seven clubs will actually make money.
“However, the EPL is driven by maximising brand value and thus TV revenues. We have shown that the clubs need increasing revenues just to function.
“If BT and Sky can’t or won’t meet the EPL’s revenue expectations, then the top six or seven clubs – and the rest of the EPL – must look for cash elsewhere to pay current player contracts, otherwise the clubs face a potentially catastrophic cash squeeze.
It’s doubtful if a European Super League could be formed to generate anything close to the sums raised by individual telly deals in the bigger leagues.
On the continent there seems to be a growing resentment over the money going into the English game which allows run of the mill clubs like Stoke and West Ham to outbid traditional clubs like Inter Milan and Borussia Dortmund for players while clubs like Ajax and Porto have been downgraded from feeder clubs to nursery operations to the English Premier League.
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