Chelsea’s huge outlay on players in 2003-04 has pushed the combined spending on players of English football clubs past the £1bn barrier for the first time.

The figure of £1.049bn, revealed in the Annual Review of Football Finance by the accounting firm Deloitte, includes spending on wages and transfer fees.

“The on-field duopoly in the Premiership has been shattered by Chelsea,” said Dan Jones, at Deloitte.

“This was by no means the first sizeable personal investment in a football club but the scale and speed of it dwarfed anything previously witnessed.

“In 2003-04 Chelsea’s revenues increased by over £50m to reach a club record of £144m and by this measure the club is now the fourth richest club in the world. We estimate Mr Abramovich’s investment now totals [around] £300m. Other clubs are not trying to compete in an unwinnable financial contest. That makes sense.”

Deloitte sports business consultant Paul Rawnsley believes clubs are taking a more sensible approach to player wages.

He said: “At the top clubs the biggest stars are still being very well paid – and the amount Chelsea are paying skews the figures.

“But in the middle ground, there are not the rates of increases seen in the previous 10 years – and even decreases.

“There has also been an increase in performance-related pay.

“It would be healthier if there was a greater move to these sorts of contracts where players were rewarded for Champions League qualification or Premier League survival.”

The Deloitte report states: “Chelsea total wages were £38m higher than the second biggest spenders, Manchester United, and almost certainly the highest football club wages bill in the world.

“There was a fall of 7% in players’ earnings in the Championship to £138m – a reversal of an average 15% increase over the last decade.

“Player wages also declined in Leagues One and Two, by 17% and 4% respectively.”

Deloitte estimates that a third of the £250m spent on foreign players and to agents came from Stamford Bridge.

“Big transfer fees and wages will continue to be paid for star players but for the majority of players the new sense of ‘realism’ will continue to limit transfer fees and we hope that more performance-dependent wages will continue to be introduced for all players.”

Premiership clubs continue to generate more revenue than any other. The Premier League earned £1.3bn of revenue in 2003-04, confirming the league’s status as the biggest in Europe by a record margin. It represents 18% of the total £7.5bn Euro pean football market.

The gap in revenue between the Premiership and Italy’s Serie A – the next most lucrative league – has widened from under €100m in 1999-2000 to €823m in 2003-04.

The Premiership accrued higher matchday revenues than France’s Ligue 1, the German Bundesliga and Serie A combined, reflecting the cost of ticket prices in the respective countries.

The change in TV rights, with the new deal’s first season just completed, has led to a further increase in the cost of attending Premier League games.

“While the new three-year broadcast deals will result in lower broadcast revenues, evidence suggests that many clubs have been successful in increasing matchday and commercial revenues to compensate,” says the report.