Established in 1992, the Premier League in England has seen phenomenal growth despite its relatively young stint as a professional football league. It pioneered televised football that was still in its infancy. The Premier League was the replacement of the old First Division and is composed of 22 teams, which was eventually cut back to 20.
Financially, the English Premier League is at the top of its class. Sponsored by Barclays Bank, this association was a recipient of the Queen's Award for Enterprise in the category for International Trade. The League recorded second of its highest revenue so far in 2007-08 season when it reached a raise of 20% to £1.93 billion in total profits alone. More than half of total number of teams achieved profit in the same year. The average salary of a regular player is about £676,000 per annum, on top of bonuses. However, clubs in the league today are experiencing financial challenges primarily due to huge bills for the players, as well as massive transfer fees for player acquisitions. In fact, several teams in the league are in tight financial spot right now, a situation that may negatively impact the league significantly if left unattended for long.
Real financial situation
Although considered to be the richest football league after its last season run which netted a total of up to £2bn, the entire league is actually struggling to survive due to overwhelming wage bill for players alone. Player salaries of the entire league reached as high as £1.3bn and are still expected to rise during the next season. Many clubs are left with nothing in terms of operating profits, putting them in a serious financial constraint. During the 2007-08 season alone, a number of clubs claimed financial loss although the league reached a new record high in profits. This means that a majority of clubs in the league are absorbing losses year in year out for several seasons now, without any sign of recovery.
Such sad situation demands immediate action, prompting league officials to act swiftly to save the league, clubs, and the players from more financial pressures. There is now ruling within the league that bars teams from spending on player acquisitions, transfers, and wages if they cannot earn it from their own revenue. They have to earn first, and then use their net profit to sign contracts for their players. Such act is seen by many to be disadvantageous for some ailing clubs, while at the same time, a good one for those clubs that has huge fan following and huge revenue reserves. Whatever the case maybe, the "spending what you are earning" policy will hold its ground in the coming seasons and is seen as the only way to redeem the Premier League from sinking in the future.
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