football, according to a document provided for The Royal Gazette by Deloitte Touche Tohmatsu International via their Bermuda-based company.

In a detailed annual review of English football finances they reveal that the sport in England is in the red in spite of $702 million (US) income.

According to the report, English football saw its income leap 21 percent to $702 million in 1994-95, but still made an overall pre-tax loss of $21.15 million.

"This slide into the red follows a profit of just $18,000 on income of $580.5 million in 1993-94. Available financial information shows that there was a cash outflow of over $46.5 million from the English game in transfer fees to Scottish and overseas clubs,'' Gerry Boon, head of the UK Football Industry Team for Deloitte Touche Tohmatsu International, said.

"But that doesn't tell the full story. The 1994-95 results show that English football's day-to-day operations are profitable, with $40.2 million of operating profits (about six percent of turnover) for the game as a whole. The losses come from a net $46.5 million of transfer fees payable and $15 million of finance costs on top of this. However, the disparity in results across the 92 clubs in England is huge.'' The profits gap between England's Premier League and the remaining divisions is widening, according to the review. Premier League operating profits were over $73.5 million, whereas Football League clubs had operating losses of just over $33.75 million.

"Premier League clubs now have by far the largest share of football's income, $484.5 million out of a total of $702 million (69 percent),'' said Boon. "To put it into perspective, Manchester United and Newcastle United together have a greater turnover than the whole Football League's Division One. We expect this dramatic growth to continue, with increasing Premier League match attendances and higher revenues following the new BSkyB satellite and cable television deals.'' Among its key findings was that Everton made the largest pre-tax loss at US $14.1 million, followed by Newcastle at US $12.3 million from its football activities while top of the pre-tax profits table was Manchester United with over US $30 million, a record for any football club.

The past year saw Newcastle United spend the most on players transfer fees at US $31.8 million which was a record for an English club in a year followed by Everton with US $19.05.

Boon said that the losses of the Football League clubs generally are a cause for concern and noted that it is difficult to see how some of them will survive in the long term.