Rising wages hit Premier League profits

Premier League clubs’ combined revenues for 2017/18 rose to a record £4.8 billion, up 6% from 2016/17 (£4.6 billion) reports Deloitte Sports Business. Clubs’ combined wage expenditure increased by £0.4 billion to a record £2.9 billion in 2017/18, with Premier League average wage/revenue ratio rising from 55% to 59%. Wage growth impacted Premier League clubs’ operating profits, falling 16% to £0.9 billion (2016/17: £1 billion). Clubs generated pre-tax profits of £0.4 billion, falling from the record £0.5 billion set in 2016/17.

The increase in revenue is in part attributable to the Premier League having a record five teams competing in the UEFA Champions League last year, all reaching the Round of 16 or beyond, resulting in a substantial increase of c.£71m in UEFA Champions League distributions to Premier League clubs. Alongside the increase in UEFA distributions, matchday and commercial revenue both grew by 8% and 12% respectively.

Increases in player spending lower down the table explain the falling profitability of clubs according to Deloitte's Dan Jones, partner and head of their Sports Business Group: 'Where there is more pressure on profits is in the bottom half where clubs are spending heavily to stay in the league.'

Jones commented: 'Premier League clubs’ revenues continued to reach new heights in 2017/18. Tottenham Hotspur’s relocation to Wembley Stadium and increased commercial activity, including the commencement of their new kit deal with Nike, contributed more than half of the Premier League’s matchday revenue growth and almost a quarter of the Premier League’s commercial revenue growth respectively, driving the club’s record levels of pre-tax profitability.'

However, the Premier League’s wages/revenue ratio increased to 59% in 2017/18, rising from the previous season’s ratio of 55%, which was a 19-year low owing to the increased broadcast revenues at the start of the current broadcast rights cycle. Almost half of Premier League clubs recorded a wages/revenue ratio of 70% or greater [above the recommended Uefa level], with overall wage spend increasing 15% to £2.9 billion. This had a direct impact on clubs’ collective operating profitability, falling to £0.9 billion, albeit still the second highest in Premier League history.'

Jones added, 'We have seen clubs’ wage expenditure increase at a faster rate than revenue growth in 2017/18. This is the same pattern as observed in the second year of the previous Premier League broadcast rights cycles, as clubs continue to invest in playing talent. 59% is the lowest wages/revenue ratio outside the first year of a broadcast rights cycle since the 1998/99 season.'

The analysis reveals that Premier League clubs made a collective pre-tax profit for the fourth time in the last five years, again the second highest profit in history, with three clubs (Arsenal, Liverpool and Tottenham Hotspur) contributing over 75% of this total, but also an increase in the number of clubs reporting a pre-tax loss.

Tim Bridge, director in the Sports Business Group at Deloitte, said: 'The increased wage expenditure was expected given the busy transfer market in the 2017/18 season, with two record transfer windows driving estimated Premier League gross spend of £1.9 billion. However, with the total value of Premier League broadcast rights expected to only marginally increase in the 2019/20-2021/22 broadcast rights cycle, increases in wage and transfer expenditure may be expected to slow in the medium term, as already signalled by the reduced estimated £1.4 billion gross transfer spend in the current season.

With the emphasis now on clubs to generate revenue growth from sources other than central broadcast distributions, it may be that we see the levels of pre-tax profit diminish over the next few years.'

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’...

Spurs CEO attacks luxury training base

The Tottenham Hotspur chief executive Vinai Venkatesham has issued a withering assessment of the way the club was run under Daniel Levy, likening the state-of-the-art training centre to a five-star hotel rather than a centre of high performance. Venkatesham was appointed to his role in April 2025, having stepped down as chief executive at Arsenal the previous summer. However, he has said that some aspects of the club were “in a significantly worse state” than he expected. “Our training centre is amazing, one of the best, if not the best in the world,” Venkatesham told BBC Sport. “But when you look around, it looks more like a five-star hotel than it does a performance environment. That will change over the summer. I think there are many areas where the club hasn’t got the right level of expertise.” He explained that the football side of operations was the club’s main downfall when he arrived last year. [One Spurs fan wryly observed that it was like a water company sayi...

Fulham requires big funding from owner

After lengthy delays, Fulham’s shiny, new Riverside Stand has finally opened, creating “a unique Thameside destination with first class facilities for supporters and partners on match days, as well as for the wider community year-round”. This ambitious project has increased Craven Cottage’s capacity by around 4,000 to 29,600, while it has also taken advantage of the club’s fantastic location and wealthy catchment area by including two Michelin star restaurants, a rooftop swimming pool, corporate hospitality and event space, all benefiting from views of the Thames. Chief executive Alistair Mackintosh observed, “Fulham is the sort of club that can have a business class or first class and have fans that turn left on a plane.” Indeed, there is also an exclusive members club – with a football season ticket as an optional extra. It’s fair to say that “the times they are a-changing”, as this is a long way from the traditional pie and a pint. However, in a world where clubs face the tw...

The Political Economy of Football V2

Search This Blog