The annual Deloittes’ Review of Football Finance continues to provide a comprehensive insight into the state of game across Europe.

The English Premier League strengthened its position as the leading revenue generator in world football with total revenues equal to €2.4 billion in the 2007/8 season. This represented a massive 24% increase in local currency terms and, despite sterling’s weakness against the euro, made the Premier League at least €1 billion bigger than the nearest rivals Germany’s Bundesliga and Spain’s La Liga.

But it is perhaps more interesting to review the domestic English game and identify the trends for the future of the game as we come out of recession.

Revenue in the 92 club league increased by 21% to £2,458 million with Premier League clubs generating £1,932 million of this. That makes the average expected turnover per club in the 2008/9 season around £100m. Big businesses indeed.

The vast majority of the income in the Premier League comes from TV deals. £767m came from centralised deals (for example Sky) with additional Champions League monies raising the total to £931m. This contrasts with only a slight increase in gate receipts by 3% to £554m as many clubs froze gate prices to combat the effects of the recession.

The impact of TV revenue is phenomenal. Even bottom placed Derby County received £29.5m in 2008/9 compared with just £16.7m received by Watford the previous year.

But only 11 premier league sides were able to show an operating profit in 2007/8 – an increase of 3 from the 2006/7 season. Non player wage costs have grown significantly in the last few years. Championship sides fared badly with operating losses rising to an aggregate £102m despite increased TV revenues, parachute payments for relegated clubs and solidarity payments.

Wages and transfers form the biggest part of the clubs’ expenditure. Over £1.2 billion was spent on wages in the premier league with a 23% increase recorded in the 2008/9 season over the previous year. The increased wage costs offset completely the increased receipts from TV broadcasters. Chelsea has the highest single club wage bill of £172m – nearly £50m higher than next club Manchester United. In the Championship, wages have now increased to represent 87% of revenues, an increase over 79% in 2006/7 and 72% in 2005/6.

Total transfer costs for the 92 clubs equated to £779m in 2007/8 – up by 35% on 2006/7. Of this, Premier League clubs spent an eye watering £664m. Of this £351m was spent outside the Football League on acquiring players from overseas clubs.

But is was debt financing at football clubs that causes the greatest concern. Net debt increased to £3.1 billion at the Premier League clubs including £1.2 billion of non interest bearing debt from club owners. 2/3rds of this debt rests with Liverpool, Arsenal, Chelsea and Manchester United. This was offset by assets of £1 billion in terms of investments and £450m in player values. Championship sides fared better with net debt of £326m but their prospects of reducing this lay only with promotion or benefactor owners. Lower divisions are mired in debt and exist on more of a day to day basis.

The recent liquidity crisis coupled with the economic downturn has reduced investor interest in football clubs. Fundraising is more difficult to achieve and more clubs face administration or liquidation unless conditions improve markedly.

The report confirms that the fundamentals and appeal of the game are strong despite the recent financial markets.