Premier League clubs’ revenues grow to record £3.6 billion, but losses return after two seasons in the black has been saved
Premier League clubs’ revenues grow to record £3.6 billion, but losses return after two seasons in the black
20 April 2017
- Premier League clubs’ combined revenues for 2015/16 season rise to record levels;
- Clubs generated combined revenues of £3.6bn, up 9% from 2014/15 (£3.4bn);
- Premier League clubs’ operating profits remain relatively stable at £0.5 billion (2014/15: £0.5 billion);
- Clubs’ record pre-tax losses of £110m, after two consecutive seasons of pre-tax profits.
Premier League clubs’ revenues increased to a new record of £3.6bn in 2015/16, according to Deloitte, the business advisory firm. Wage costs increased by 12% to £2.3bn, resulting in combined operating profits (excluding player trading, net interest charges and the amortisation of player contracts) of £0.5 billion (2014/15: £0.5 billion).
Dan Jones, partner and head of the Sports Business Group at Deloitte, commented: “The 2015-16 season saw Premier League clubs grow revenues by almost 10% to £3.6bn, with the two Manchester clubs alone responsible for more than 50% of the increase.
“Manchester United’s participation in the 2015/16 UEFA Champions League, coupled with continued strong commercial revenue growth, resulted in a 30% increase in revenue to £515m. This saw them top the Deloitte Football Money League for the first time since 2003/04, as the world’s highest revenue-generating club.
“Increased distributions to clubs competing in Europe, under the new UEFA broadcast rights cycle – notably Manchester City, who reached the semi-finals of the UEFA Champions League – also contributed to Premier League clubs’ revenue growth.”
A combination of increased wage costs, increased amortisation charges, arising from Premier League clubs’ then record transfer expenditure in the summer 2015 transfer window, and £110m of exceptional costs, resulted in an aggregate pre-tax loss of around £110m in 2015/16; the first combined pre-tax loss since the 2012/13 season.
Jones added: “Our analysis reveals a return to pre-tax losses, following two consecutive years of pre-tax profits. However, it is worth noting that this is due to a small number of one-off “exceptional” costs, and we fully expect that the Premier League’s new three-year broadcast rights deal will see a return to record levels of profitability in the 2016/17 season.”
Adam Bull, senior consultant in the Sports Business Group at Deloitte, said: “We have already seen to some extent the impact of the current broadcast rights deal, with clubs’ combined transfer expenditure over the course of the 2016/17 season reaching almost £1.4 billion – eclipsing the previous record set in 2015/16 by one-third and far exceeding any other league in world football.”
Notes to editors
Operating profit/(loss) and profit/(loss) before tax for Premier league clubs 1998/99 to 2015/16
The analysis of the financial results of Premier League clubs for 2015/16 has been based on figures extracted from the latest available company or group financial statements in respect of each club and, for a few clubs, informed estimates.
In general, the financial figures are extracted from the annual financial statements of the legal entity registered in the United Kingdom which is at, or closest to, the ‘top’ of the ownership structure in respect of each club. In some cases Deloitte has made adjustments to club’s figures to enable, in our view, a more meaningful comparison of the football business on a club by club basis and over time.
The published financial statements of clubs rarely split wage costs between playing staff and other staff. Therefore, references to wage costs relate to total wage costs, including both playing staff and other staff. For the purpose of this analysis, references to operating result (profit or loss) is the net of clubs’ revenues less wages and other operating costs, excluding player trading (amortisation of transfer costs and profit/loss on disposal of players) and certain exceptional items.
For more than 25 years Deloitte has documented clubs’ business and commercial performance in the Deloitte Annual Review of Football Finance, applying consistent methodologies. The next edition of the Deloitte Annual Review of Football Finance will be published in June 2017, shortly after the end of the 2016/17 season, and will include more in-depth analysis including financial analysis on a club by club basis. More information about previous editions of the Deloitte Annual Review of Football Finance can be found on www.deloitte.co.uk/arff
About the Sports Business Group at Deloitte
Over the last 25 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
In this press release references to Deloitte are references to Deloitte LLP, which is among the country's leading professional services firms.
Deloitte LLP is the United Kingdom member firm of Deloitte Touche Tohmatsu Limited (“DTTL”), a UK private company limited by guarantee, whose member firms are legally separate and independent entities. Please see www.deloitte.co.uk/about for a detailed description of the legal structure of DTTL and its member firms.
The information contained in this press release is correct at the time of going to press.
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