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Annual Review of Football Finance 2015: Premier League clubs generate over £3bn revenue in season of records
• In 2013/14, Premier League clubs generated £3.26 billion; up 29% on 2012/13
• Premier League clubs recorded record operating profit of £614m and record pre-tax profit of £187m
• 19 Premier League clubs recorded an operating profit and 14 recorded a pre-tax profit
• Top 92 professional clubs contributed around £1.4 billion in taxes in 2013/14
• Premier League revenue was €1.6 billion (£1.4 billion) higher than the next highest earning league, the Bundesliga
• Combined revenues of ‘Big Five’ leagues was €11.3 billion (£9.5 billion) in 2013/14
• Premier League could surpass commercial revenue of Bundesliga and lead the world in all three key revenue categories from 2014/15
Fuelled by the impact of the first year of a new broadcast rights cycle, Premier League clubs generated record revenue of £3.26 billion in 2013/14 – up 29% on 2012/13 – according to the 24th Annual Review of Football Finance from the Sports Business Group at Deloitte.
The average revenue for a Premier League club in 2013/14 was £163m – just £7m less than the combined revenues of the 22 First Division clubs in 1991/92; the final season before the introduction of the Premier League.
Dan Jones, Partner in the Sports Business Group at Deloitte, explained: “The impact of the Premier League’s broadcast deal is clear to see. Broadcast income increased by £569m in 2013/14, accounting for 78% of the overall growth in revenue in the Premier League. Continued growth in both commercial and matchday revenue helped Premier League clubs’ combined revenues reach £3.26 billion – a staggering increase of £735m compared with the season before."
“In 2013/14 even the Premier League club receiving the least from domestic league broadcast distributions earned more from this source than all but five other European clubs. Following recent announcements of commercial deals for a host of the largest clubs, we expect the Premier League to surpass the Bundesliga in commercial revenue terms and hence lead the world in all three key revenue categories from 2014/15.”
Other key findings of the Deloitte Annual Review of Football Finance 2015 include:
• The ‘big five’ European leagues’ combined revenues rose by 15% to €11.3 billion in 2013/14, with the Premier League more than €1.6 billion higher than the next-highest revenue-generating league, Germany’s Bundesliga, which generated €2.3 billion;
• The Premier League surpassed the Bundesliga as Europe’s most profitable league. Clubs in France’s Ligue 1, by contrast, generated a combined operating loss of €140m, €137m worse than 2012/13;
• Manchester United generated an all-time record operating profit of £117m, whilst Tottenham Hotspur recorded the highest-ever pre-tax profit, of £80m;
• Despite no new stadia opening for the first season since 2004/05, capital expenditure by English football’s 92 league clubs totalled £280m, representing the highest-ever level of investment in stadia and facilities;
• Total transfer expenditure for the 92 English League clubs in 2013/14 topped £1 billion for the first time, a record which has already been surpassed by transfer activity in the 2014/15 season;
• Premier League clubs reduced their aggregate level of net debt by 6% to £2.4 billion, (of which over two-thirds is non-interest bearing) benefitting from an increase in cash balances. Nine clubs improved their net debt/funds position over the course of the season, with Arsenal, Aston Villa and Tottenham Hotspur responsible for a combined reduction of £205m in net debt;
• Total owner investment at both Chelsea and Manchester City topped £1 billion at each club since their respective takeovers;
• The Government’s tax take from the top 92 professional football clubs in 2013/14 was around £1.4 billion.
Premier league clubs also made a combined operating profit of £614m, up from £82m in 2012/13, and an aggregate pre-tax profit of £187m – the first since 1998/99. This was almost four times greater than the previous record of £49m, set way back in 1997/98.
Jones said: “Premier League clubs also showed relative restraint in terms of wage costs, with less than 20% of their revenue growth being absorbed by wage costs. Indeed, the Premier League’s wages to revenue ratio reduced to 58% (from 71%) in 2013/14, the lowest it has been since the 1998/99 season. The current broadcast deal also comes as cost control regulations, at both domestic and European level, have caused many clubs to rein in their spending relative to the revenue they are now capable of generating. The end result has been a remarkable turnaround in profitability.”
In the Championship, overall revenue increased by 12% to £491m, however, clubs continue to pay more in wages (£518m) than they earned in revenue. The wages/revenue ratio in the second tier was 105% in 2013/14, compared with 106% in 2012/13. This resulted in operating losses of £222m and a combined pre-tax loss of £247m.
Adam Bull, Senior Consultant in the Sports Business Group at Deloitte, commented: “Championship clubs continue to deliver some alarming financial results. Whilst the desire of individual clubs to reach the promised land of the Premier League is understandable, and heightened given the value of the new broadcast deals, The Football League is right to try and ensure this is not at the expense of the long-term sustainability of any club.”
Notes to Editors:
The average exchange rate for the year ending 30 June 2014 has been used to convert figures between Euros and Pounds Sterling (£1 = €1.1958).
About the Sports Business Group at Deloitte
Over the last 20 years Deloitte has developed a unique focus on the business of sport. Our specialist Sports Business Group offers a multi-disciplined expert service with dedicated people and skills capable of adding significant value to the business of sport. Whether it is benchmarking or strategic business reviews, operational turnarounds, revenue enhancement strategies or stadium/venue development plans, business planning, market and demand analysis, acquisitions, due diligence, expert witness, audits or tax planning; we have worked with more clubs, leagues, governing bodies, stadia developers, event organisers, commercial partners, financiers and investors than any other adviser.
For further information on our services you can access our website at www.deloitte.co.uk/sportsbusinessgroup
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