New riches will help Premier League clubs on to an even keel

The new TV deal should help Premier League clubs level off their finances - if they use the money wi

The new TV deal should help Premier League clubs level off their finances - if they use the money wisely. - Credit: PA

Half the clubs in the Premier League are still making losses despite record overall revenues – but the huge new TV deal could drag most out of the red if chairmen resist blowing the money on player wages, says a new report.

The Deloitte Annual Review of Football Finance 2013 says the extra TV cash plus new spending controls could have significant beneficial effects for top-flight and Championship clubs if it is managed properly.

From August, clubs in the Premier League will receive an extra £25m on average each year from the new TV contracts, and for most clubs that could wipe out their losses.

Indeed, two years in the Premier League have helped turn the previously perilous financial position at Norwich City into the Carrow Road club being externally debt free come their next set of accounts.

And from now on, top-flight relegation will be eased by up to £60m in parachute payments.

The Deloitte report predicts player wage costs will rise considerably with the new TV money coming in – but says clubs should keep that rise to respectable levels.

Premier League clubs' revenue reached a record £2.36bn in 2011-12, but most of that increase went on wages – up 4pc – to remain 70pc of total turnover.

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In the Championship, the picture is even more alarming with only five of the 24 clubs finishing in the black and overall 90pc of all revenue going on wages.

In comparison with the rest of Europe, the Premier League clubs continue to have the highest revenue, £2.4bn compared to Germany's £1.5 bn and Spain's £1.4bn. The Bundesliga remains the most profitable however, with operating profits of £154m, followed by the Premier League's £98m. Debt levels at top-flight clubs remained similar at £2.4bn, but 59pc of this is non-interest bearing 'soft loans' mainly involving three clubs – Chelsea (£895m), Newcastle (£267m) and QPR (£93m).