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 Posted by ESPN Staff
Sep 4, 2006

Prem suitors attracted by £1.7bn TV deal - Analyst

Premiership clubs have never been more attractive to outside investors, according to a leading football business analyst.

Deloitte Sports Business Group consultant Alan Switzer contends that the Premier League have given their clubs every chance of becoming highly profitable with the TV contracts worth £1.706billion which were signed earlier this year.

The deals with BSkyB and Setanta come into operation next season, when clubs will receive their first windfalls, and with the three-year deal worth 67% more than the current contract they stand to cash in.

Switzer points to signs of player wage bills being cut and he expects that trend to continue during coming seasons, with the savings made going towards improving the financial health of clubs.

'The volume of investors certainly has increased in the last year or so,' said Switzer.

'In terms of why, the current financial outlook for Premiership clubs has never been so strong, particularly with the new broadcasting deals starting next season.'

The new revenue going into Premiership clubs might have been expected to bump up transfer fees and wages, but Switzer observes that 'it is all bottom line and potentially profit'.

'The key thing for clubs is to keep that in the club,' said Switzer.

'In the past when TV deals have been announced, a large chunk has gone on player wages.

'This time we're confident clubs will be able to retain a large amount of that.

'Also the overseas TV deal is going to be announced soon, and (Premier League chief executive) Richard Scudamore has gone on the record saying that's going to be 50% higher than the previous deal. It confirms the Premiership's global popularity.'

Manchester United have American owners after Malcolm Glazer completed his takeover last year, Aston Villa have seen Cleveland Browns chief Randy Lerner buy out former chairman Doug Ellis this summer, and Chelsea have been revolutionised as a club since Russian Roman Abramovich's arrival.

Portsmouth's French owner Alexandre Gaydamak has also made a big impression in the short time he has been at the Fratton Park helm, authorising a spending spree by manager Harry Redknapp and seeing the club's on-pitch fortunes revived.

West Ham are the latest to be linked with a takeover, and have opened 'exploratory' talks with unnamed potential investors.

Kia Joorabchian, who has engineered the transfer of Javier Mascherano and Carlos Tevez from Corinthians to Upton Park, has been linked either as an investor or frontman for a consortium, although he has yet to confirm his involvement.

The approach to West Ham's board appears to offer further evidence of the healthy state of the English game, with Switzer convinced all such approaches are a vote of confidence for the Premiership.

'The interest in English clubs, whether foreign or coming from the UK, is an indication of the health of the Premiership,' Switzer confirmed.

'The clubs must take some credit but the Premier League equally, as it was they who negotiated the TV deals.

'We are not at a peak, because with the new TV deal the clubs have the potential to grow.

'What has happened is clubs have managed their costs against revenues better. That was probably the key driver of increased profits.'

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