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.'

It's no deal say Spurs insiders over Taiwanese takeover

Senior figures at Tottenham Hotspur insisted on Friday that they had not been informed of any deal to sell Daniel Levy’s stake in the club. A business group, Eight Sports Capital — which is said to include a billionaire Taiwanese financier — claimed that it had an agreement in place to buy a 24.99 per cent stake in ENIC, the club’s majority owners, from Levy, who owns 29.88 per cent. The Times has been told Ng Wing Fai and Brooklyn Earick form part of the group, having both been linked previously to potential takeovers of the Premier League club. The Taiwanese businessman, Richard Tsai, is also said to be part of the consortium. He is reportedly worth £7 billion. Last year Earick, the former DJ and tech entrepreneur, was part of an attempted £4.5 billion takeover, which was “unequivocally rejected” by Spurs. An ENIC spokesperson said: “We can confirm that neither ENIC nor THFC are aware of any sale by Daniel Levy’s Family Trust of its minority stake in ENIC, THFC’...

Reports about Charlton sale exaggerated

Reports have appeared in The Guardian and elsewhere that Charlton has been put up for sale. Richard Cawley is an authoritative local journalist who runs a South London Sport substack site. He reached out to the club yesterday evening to ask for comment on The Guardian’s article. Early indications from the club have been that nothing has changed since the story about them seeking investment, except that it is now a different company doing it. Charlton have since managed to consolidate their place in the Championship, avoiding an instant return to League One, with their women’s side promoted to the WSL, returning to the top flight for the first time since 2007, although staying there is likely to be costly. It would be counter-intuitive for owners Global Football Partners not to progress the club when looking for investment, that the focus remains on driving it forward, that their spend this summer is in line with long-term planning and will see an increase in wages spent on players...

Hull City's 'strange' loan

When football finance guru Kieran Maguire seems flashing lights in a club's loan deal, I become concerned. He is the leading football finance expert in the UK. Hull City have borrowed £55m against their stadium and training ground yet they should get £30m from the Premier League before long. What is going on? https://www.bbc.co.uk/sport/football/articles/cpwel48y51do

The Political Economy of Football V2

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