LONDON, May 29 (Reuters) - Top German soccer clubs have become the most profitable in Europe, overtaking England's Premier League despite the latter's growing lead in revenue, a report said on Thursday.
The Bundesliga became Europe's most profitable league in the 2006/07 season (the last data available), knocking the premiership from its top spot, according to the Annual Review of Football Finance published by accountancy firm Deloitte.
"The pursuit of on-pitch success and the intense competitive desire to gain an edge means (English) clubs continue to invest heavily in their playing squads ... to the detriment of all clubs' finances and the benefit of players and their agents," said Dan Jones, a partner at the Sports Group at Deloitte.
The German league, which includes teams such as Bayern Munich, earned 250 million euros ($393.1 million) in operating profit, or 18 percent of its revenue, in the 2006/07 season, compared with the Premier League's 141 million euros, giving a margin of 6 percent, the report said.
German profitability reflects clubs' ability to keep players' salaries under control and is despite the Bundesliga's combined revenue of 1.3 billion euros falling well short of the 2.2 billion euros generated by the Premiership, the report shows.
The Premier League generates about a quarter of the combined 13.6 billion euro revenue of Europe's top soccer leagues, but English clubs such as Chelsea -- which pays captain John Terry more than 125,000 pounds a week -- have spent much of their spiralling revenue in attracting and keeping players, the report says.
While English clubs spend about two thirds of their revenue on players' salaries, German clubs allocate about 45 percent, the report says.
The Premier League's total wages were more than 600,000 euros higher than Spain's La Liga and double the total wage costs of any of the German, French, Italian and Spanish leagues, the report shows.
Prudence at German clubs is maintained as some teams are still considered non-profit organisations and as a law prohibits any individual from owning a controlling stake in any club.
That is a different model from England, where billionaires such as Russian oil tycoon Roman Abramovich have bought into clubs and inflated the market by paying high salaries and transfer fees.
Ten of the 20 present Premier League clubs are owned by non-UK nationals, the report notes.
"The improvement in cost control which would demonstrate a normal business culture of maximising profitability does not appear to be happening at the Premier League clubs," Jones said.
The Premier League, however, wins in revenue and worldwide attention. It attracts about 2.9 billion global viewers per season and is expected to generate more than 1.9 billion pounds in revenue in the 2007/08 season, lifted by a new broadcasting rights deal.
The English league seems to also win on the pitch. Two English teams, Chelsea and Manchester United, earlier this month played in the final of the lucrative Champions League, a trophy that hasn't gone to Germany since Bayern Munich won it in 2001.