Record Premier League profits

Premier League clubs’ combined revenue increased by nearly £1bn to £4.5bn in the 2016/17 season, a new record, report Deloitte Sports Business. Collective pre-tax profit of £0.5bn was almost three times the previous record of £0.2bn in 2013/14. Clubs generated record operating profit of £1bn – double the amount reported for the 2015/16 season. Wage costs across the league rose by 9% to £2.5bn, a new record, but significantly slower growth than the 25% increase in overall revenue.

Premier League clubs generated a combined operating profit of £1bn in the 2016/17 season. Clubs collectively reported £0.5bn in pre-tax profit, also a league record, with wages increasing by 9% to £2.5bn. Dan Jones, Partner and head of the Sports Business Group at Deloitte, commented: 'As predicted last year, the Premier League’s three year broadcast deals which came into effect in the 2016/17 season helped drive revenue to record levels.'

'Despite wages increasing by 9% to £2.5bn, this increase is nowhere near the level of revenue growth noted. This relative restraint from Premier League clubs reflects both the extent of their financial advantage over other leagues and the impact of domestic and European cost control measures.'

The restraint shown by clubs to control their wages (spending only 23p of every extra £ of revenue on increased wages) has translated broadcast revenue success into healthy operating and pre-tax profits. All 20 clubs made an operating profit and 18 of 20 recorded a pre-tax profit. The collective revenue to wage ratio is down from 63 per cent to 55 per cent in the 2016/17 season, the lowest since the 1997/98 season.

The analysis reveals that Premier League clubs have collectively made a pre-tax profit in three out of the last four years and, despite clubs posting a collective pre-tax loss in 2015/16 season (due to a small number of one-off exceptional costs), it is likely that Premier League profits are here to stay.

Jones added: 'Although we anticipate wage costs will continue to rise in the coming seasons, we do not foresee increases to be at a level which can jeopardise the profitability of the Premier League as a whole. The most significant wage increases have tended to occur in the year prior to the commencement of a new broadcast cycle once a substantial revenue increase is secured.'

'Despite the lack of growth in domestic broadcast deals announced to date, we still expect to see overall revenue growth in the coming seasons, and if this is complemented with prudent cost control, we expect that pre-tax profits will be achieved for the foreseeable future.'

Tim Bridge, Senior Consultant in the Sports Business Group at Deloitte, said: 'We have already seen some clubs utilising their significant revenue increases, with a record £1.9bn spent on transfers in the 2017/18 season. We may again see similar levels of spending in the coming season, with the FIFA World Cup providing the perfect shop window for talent, but expenditure remains well within the means of clubs.'

Wolves get raw deal from FFP

I used to see a lifelong Wolves fan for lunch once a month. He was approaching ninety, but still went to games. Sadly he passed away the other week. As football finance guru Kieran Maguire has noted, Wolves continue to be constrained by financial fair play rules. Radio 4 this morning described them as this year's 'crisis club' and the pessimists have certainly been piling in. Martin Samuel wrote sympathetically in the Sunday Times yesterday, saying that the Premier League drives talent away with regulatory red tape: 'Why could Al-Hilal sign Neves? Because Wolves needed the money. And why did Wolves need the money? Because the club had to comply with an artificial construct known as financial fair play. So Wolves are going skint, yes? No. There is no suggestion that Wolves are in financial trouble, only that they are failing to meet the rigours of FFP. Wolves’ owners appear to have the money to run the club, and invest in the club, and in fact came up with a pow

Gold standard ground boosts Tottenham's income

The gold standard in European football grounds is the Tottenham Hotspur stadium in north London, a £1bn construction project completed in 2019. Its impact on the club’s finances has become increasingly clear as the effects of the pandemic have faded. Previously, the average fan would spend less than £2 inside the ground on a typical match day, but now that figure is about £16, thanks to new facilities including the longest bar in Europe and an on-site microbrewery. Capacity has gone up from 36,000 at the club’s previous home of White Hart Lane to 62,000. The new stadium — built on land adjacent to White Hart Lane — has opened the door to a broad range of other events that have helped to push commercial income up from €117mn in 2018 to €215mn in 2022. Last year, Tottenham hosted US singer Beyoncé for five nights on her global Renaissance tour, two NFL matches, as well as rugby games and heavyweight boxing bouts. Money brought in from football has gone up too. Match day income is

Charlton takeover approved

The long awaited takeover of Charlton Athletic by SE7 Partners from Thomas Sandgaard has been approved: https://londonnewsonline.co.uk/se7-partners-obtain-efl-approval-for-charlton-athletic-takeover/ Charlton have had unhappy experiences with owners for over a decade, so how this works out will remain to be seen. There is certainly potential there, but will it be realised? This interview with Charlie Methven gives detail not available elsewhere: https://thecharltondossier.com/charlie-methven-on-the-record/

The Political Economy of Football V2

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