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Profits on player trading up

The authoritative Swiss Ramble comments, 'Looking through the Premier League finances for 2016/17, one thing I noticed was a dramatic increase in the reported profit on player sales.' He sets out to analyse this increase and also tries to explain the mysteries of player trading accounting.

Total profit on player sales in the Premier League in 2016/17 was £512m, which was a massive £215m (73%) higher than £297m in the previous season (£295m in 2014/15).

In 2016/17 Chelsea had the highest profit on player sales for the second season in a row with £69m, mainly due to Oscar’s transfer to Shanghai SIPG, followed by Everton £52m, Southampton £42m and Spurs £40m. Interestingly, Manchester United and Arsenal only had £11m and £7m respectively.

It’s a similar story for the last 4 years combined with Chelsea again leading the way with a hefty £224m profit on player sales, followed by Tottenham £192m, Southampton £147m and Liverpool £136m. Again, Arsenal £45m and Manchester United £32m are relatively low.

If we consider profit on player sales as a revenue stream, its growth in absolute terms of £326m since 2011 is significantly lower than broadcasting £1,481m and commercial £615m, but it does have the highest percentage growth of 175%.

Profit on player sales as a share of total revenue has risen from 8% in 2011 to over 10% in 2017, partly due to the limited growth in match day income from £525m to £603m, resulting in the share of that revenue stream declining from 22% to 12%.

The Swiss Ramble comments, 'One obvious reason for the increase in profit on player sales is the huge growth in the Premier League TV deal, especially the overseas rights. It’s not an exact correlation, but we can safely conclude that this has increased clubs’ buying power – and driven up the price charged.'

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