MUMBAI: The total European football market grew to a record ?15.3 billion in 2010/11 with the English Premier League clubs generating highest revenue at ?2.3 billion, according to the 21st Annual Review of Football Finance from the Sports Business Group at Deloitte.

Premier League is followed by Germany and Spain (each ?1.6 billion), Italy (?1.4 billion), and France (?0.9 billion).

However, Germany?s Bundesliga remained Europe?s most profitable league with operating profits of ?154 million, a 24 per cent increase on the previous year and widening the gap to the Premier League, where operating profits decreased by ?16 million to ?68 million.

In total, the top 92 clubs in English football saw revenues increase by nine per cent to ?2.9 billion driven largely by broadcast revenue increasing by 13 per cent, to ?1.2 billion in the first year of a new three-year broadcast cycle.

More than 80 per cent of the Premier League clubs? revenue increase was spent on wages, which increased by ?201 million to almost ?1.6 billion, and resulted in a record Premier League wages/revenue ratio of 70 per cent. The top 92 English clubs invested ?167 million in stadia and facilities.

Deloitte Sports Business Group Partner Dan Jones commented, ?The uplift (in revenue) was primarily due to an increase in overseas broadcast deal values, demonstrating once again the Premier League?s unrivalled global popularity.?

The study noted that the operating profits of the clubs reduced by ?16 million to ?68 million and combined pre-tax losses were ?380 million despite increase in revenue as gross transfer spending by Premier League clubs witnessed a 38 per cent increase to reach record level of ?769 million.

?The challenge for clubs remains converting impressive revenue growth into sustainable profits. This will become even more important for a number of clubs as the financial results for 2011/12 will, for the first time, count towards their Uefa Financial Fair Play break-even calculation,? noted Deloitte Sports Business Group Consultant Adam Bull.

Of the ?2.4 billion net debt in the Premier League, 62 per cent is in the form of non-interest bearing ?soft loans?, of which almost 90 per cent relates to three clubs - Chelsea (?819m), Newcastle United (?277m) and Fulham (?200m).

On the positive side of the balance sheet, Premier League clubs recorded a carrying value of tangible fixed assets of almost ?1.9 billion, reflecting the huge investment in facilities seen over the past two decades and a carrying value of player registrations of around ?1.2 billion.

Commenting on the regulatory developments in the game, Deloitte Sports Business Group Director Paul Rawnsley said, ?The rulebooks in England have evolved in recent years to enable a more interventionist approach by the football authorities at all levels of the professional game. In addition, clubs competing in Uefa competitions from the 2013/14 season will be monitored for compliance with the break-even requirement. This is the cornerstone of Uefa?s financial fair play regulations which aim to help clubs across Europe achieve a more sustainable balance between their costs and revenues and encourages investment for the longer term benefit of football.

"A significant number of clubs around Europe have some distance to travel on the road towards compliance. For many clubs there is a renewed focus on increasing revenues and the cost-side of the business model of some clubs also needs adapting. Overall, we expect the effective implementation of these measures, at both domestic and international levels, will help deliver a better balance between clubs? costs and revenues."

MUMBAI: European entertainment network RTL Group has earned a profit of ?795 million for the year ended December 2011, a rise of 8.9 per cent over the earlier year.

Revenue was up 4.2 per cent to ?5.7 billion, mainly based on higher revenue from FremantleMedia and RTL Nederland. Following an exceptional 2010, RTL Group?s profitability remained very high: reported EBITA was ?1.1 billion, while return on sales decreased slightly to 19.7 per cent. Net profit attributable to RTL Group shareholders is up 13.9 per cent to ?696 million Net cash from operating activities was ?1 billion, resulting in an operating cash conversion of 104 per cent and a net cash position of ?1,238 million at the end of 2011 .

RTL Group CEO Gerhard Zeiler said, "2011 was marked by three main developments.First, all of our families of channels maintained or increased their strong audience shares. This was the foundation to outperform the increasingly challenging TV advertising markets in almost every country we operate in. Secondly, RTL Group succeeded in maintaining its profitability at the very high level achieved in 2010: EBITA of over ?1.1 billion, EBITA margin of almost 20 per cent, and net profit of ?696 million ? all these key indicators were either stable or even up year-on-year."

Thirdly, RTL Group developed its international portfolio during 2011, to safeguard its leading market positions and to develop new businesses.

"We regained full control of our highly profitable Dutch TV
operations, and bought out minority shareholders in Hungary and Croatia to build strong families of channels. Targeted online acquisitions in Germany and the Netherlands significantly strengthened our new media activities in these countries. Finally, we signed an agreement to exit the declining Greek broadcasting market," Zeiler said.

RTL sees different developments in the various countries it operates in.

"Looking at January and February 2012 we can say that the negative development many had feared did not happen. Given the high volatility of the various TV advertising markets throughout Europe, and the very short-term bookings cycle, it is not possible to give full-year guidance at the moment. However, RTL Group has repeatedly demonstrated that it can operate successfully in very difficult economic environments," Zeiler said.

The European TV ad markets reflect a mixed picture in 2011: rather flat developments in Western Europe, with the exception of Belgium and the Netherlands, which were up.The markets in Southern and Eastern Europe reported lower advertising revenue compared to 2010. the year also saw the exit of Alpha Media Group, treated as discontinued
operations; and unwind of Talpa transaction completed.

With RTL Television reporting significantly higher audience ratings, Mediengruppe RTL Deutschland continued to increase its clear audience leadership over its main competitor, P7S1 Group, to 6.1 percentage points. With an EBITA of ?529 million, the profit centre achieved its second-best result ever ? by a large margin ? despite a challenging German TV advertising market and higher investments in programming.

In France, M6 was the only major French channel to increase its audience share year-on-year, while digital channel W9 reported significant growth, both in terms of advertising revenue and audience ratings. EBITA of Groupe M6 was up 1.6 per cent to ?249 million.

RTL Nederland scored its best ratings since 1997 and succeeded in capitalising them into double-digit growth of TV advertising revenue. EBITA increased 21.8 per cent to ?134 million for both TV and radio operations.

RTL Group?s production arm FremantleMedia reported revenue growth of 12.3 per cent, driven by higher revenue in North America and the first-time full consolidation of recent acquisitions Radical Media and Ludia. FremantleMedia?s EBITA was up 2.1 per cent to ?143 million, despite general pressure on margins and volumes from broadcasters RTL Radio in France reported EBITA growth of 25.0 per cent, at ?30 million.

RTL Group strengthens its portfolio by taking full control of RTL Nederland: following the exercise of a put option, RTL Group exchanged its 73.7 per cent interest in Radio 538 for Talpa Media Holding?s 26.3 per cent minority shareholding in RTL Nederland.

RTL Group acquired a portfolio of seven Hungarian cable channels plus a further 31 per cent shareholding in the country?s number one channel, RTL Klub. This acquisition, plus a separate smaller deal, brings RTL Group?s shareholding in RTL Klub to 100 per cent, and provides the ideal platform on which to build a complementary family of channels, and to safeguard market leadership in Hungary.

It also took full control of the Croatian broadcasting operation: RTL Group acquired the respective 13 per cent shareholdings of its local business partners in RTL Hrvatska (RTL Televizija and RTL 2, launched in January 2011)

Decision to exit the Greek broadcasting market: In the light of the country?s serious and on-going economic and financial crisis, RTL Group sold its 70 per cent majority shareholding in Alpha Media Group to the Greek entrepreneur Dimitris Contominas.

In June 2011, RTL Group swapped its 30 per cent shareholding in Ren TV for a 7.5 per cent shareholding in the Russian media company National Media Group (NMG), as part of an agreement with the current shareholders of NMG. Mediengruppe RTL Deutschland will launch new free-TV channel, RTL Nitro, on 1 April 2012.

RTL Group?s new media activities continue to grow: In 2011, RTL Group?s online platforms and on-demand offers across Europe collectively generated 1.9 billion video views of professionally produced content ? up 35 per cent year-on-year. Total online ad revenue was up 23 per cent year-on-year, driven by video advertising. RTL Group companies have launched 125 mobile applications, registering 38 million downloads to date.

Mobile live TV services are now available in Germany, France, the Netherlands, Belgium and Luxembourg. Pay-TV channels in Germany, France and the Netherlands are operating at a profit.