The authoritative Swiss Ramble has been making good use of the festive break to provide a decade long overview of the cash flow of Premier League clubs. In the 10 years between 2008 and 2017 Premier League clubs had over £8 bn of available cash with more than half (£4.3 bn) generated from their own operating activities and a further £3.4 bn from their owners (loans £1.8 bn and shares £1.6 bn) plus £0.3 bn external loans.
54% of cash came from operations (revenue less expenses +/- movements in working capital) with another 42% from owner financing and 3% from external loans.
Unsurprisingly, the Big Six clubs have enjoyed by far the most cash: Manchester United £1.6 bn, Manchester City £1.4 bn, Tottenham Hostpur £837m, Arsenal £754m, Liverpool £645m and Chelsea £607m. However, these clubs have very different business models, e.g. Manchester United £1.3 bn from operations, Manchester City £1.3 bn from owners.
So three of the Big Six clubs have been largely financed by cash generated from operations: Arsenal 100%, Spurs 81% and Manchester United 80%. In contrast, others have been much more reliant on owner financing: Manchester City 90% and Chelsea 86%. Liverpool is more balanced: operations 53%, owners 40%.
To illustrate Manchester United's amazing ability to generate cash, their £1.3 bn over the last decade is almost twice as much as the next highest Arsenal £754m, followed by Spurs £675m, then another big gap to Liverpool £341m. The majority of Premier League clubs produced between £60m and £150m.
In contrast, Manchester City have benefited from £1.3 bn of owner financing, much more than the next highest Chelsea £0.5 bn. it is worth noting how important this has been to some smaller clubs, e.g. Leicester City £257m (71% of total cash), Sunderland £189m (66%), Stoke £106m (50%) and Bournemouth £73m (93%).
Few Premier League clubs have needed to secure external loans from banks with the main exceptions driven by stadium development, e.g. Spurs £148m and Liverpool £48m. The next largest was Sunderland £33m after Ellis Short became fed up of putting money in.
Almost half of the £8.1 bn Premier League cash 2008-17 has been spent on purchasing players £3.8 bn – and that’s net of sales. A further £1.6 bn has gone on capital expenditure, largely stadium and training ground, while £1.7 bn has been used for loan and interest payments.
Manchester City have spent by far the most (net) on players with £906m, followed by Manchester United £528m, Chelsea £393m, Liverpool £351m and Arsenal £236m. Spurs have only spent £98m on their squad, while Stoke will be disappointed with the return on their £190m investment (6th highest).
Tottenham Hotspur have invested nearly £0.5 bn in their new stadium and training ground, much more than Manchester City £333m, Liverpool £209m, Arsenal £104m, Chelsea £103m and Manchester United £98m (Arsenal figure looked a bit low to me, but the Swiss Ramble pointed out that most of the spend was before 2008 and is reflected in the mortgage payments in the next paragraph).
Manchester United have paid a hefty price for the Glazers’ ownership with £0.8 bn of loan and interest payments over the decade. That’s over £500m more than Arsenal, though the Gunners have had to shell out £278m for the Emirates mortgage.
In addition, United paid £53m dividends (plus an additional £22m in 2018), while West Bromwich Albion paid £27m to their parent company in 2016. The only other Premier League clubs to pay dividends in this period were Tottenham Hotspur £7m and Swansea City £4m.
The Swiss Ramble states: 'The main conclusion is clear, namely the Premier League is the place to be to generate cash. This helps explain the attraction to so many overseas investors. It’s a very different story lower down the English pyramid.
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