Press releases

Record revenues sustain impressive profits despite Premier League clubs’ investment in players

15 April 2016

  • Second consecutive year of Premier League pre-tax profitability for the first time this century
  • Premier League clubs’ pre-tax profits of close to £120m, down from £190m in 2013/14
  • Premier League clubs have operating profits of almost £550m, the second highest ever
  • Combined revenues increased marginally by 3% to £3.4bn, a new record
  • Clubs’ wage costs rose by 6% to a record £2bn in 2014/15, with wages/revenue ratio up slightly from 58% to 60%
  • Financial health of Premier League clubs led to record summer 2015 transfer spending of £870m

For the first time since 1999, Premier League clubs have recorded a second consecutive year of aggregate pre-tax profits, generating approximately £120m in 2014/15, according to Deloitte, the business advisory firm. This is the second highest-ever aggregate pre-tax profit for Premier League clubs, and follows last year’s record-breaking profit of £190m for the 2013/14 season.

In addition, in 2014/15 Premier League clubs recorded combined operating profits (which excludes player trading, net interest charges and the amortisation of player contracts) of more than half a billion pounds. Despite being lower than the operating profit achieved in the first year of the current broadcast rights deals in 2013/14, this is nevertheless the second highest ever. Of the 20 clubs in the Premier League, 17 recorded an operating profit in 2014/15.

Dan Jones, Partner in the Sports Business Group at Deloitte, commented: “The perennial problem for Premier League clubs was to convert impressive revenue growth into profitability. We saw this problem solved with record breaking results last year. The new challenge was to sustain this financial success, and the Premier League clubs have accomplished this in impressive style in the latest results.

“With further significant revenue increases already guaranteed for the next broadcast cycle, starting in 2016/17, there is every reason to be confident of the Premier League clubs’ profitability being here to stay.”

Deloitte’s Sports Business Group can also reveal that Premier League clubs’ wage costs rose by 6% in 2014/15, to a total of £2bn, a new record, increasing the wages/revenue ratio to 60%. Despite the increase in wage costs, the ratio is still the second lowest in the Premier League in the last ten years.

Adam Bull, Senior Consultant in the Sports Business Group at Deloitte, said: “Premier League clubs now enjoy a significant revenue advantage over all but a handful of the biggest clubs from elsewhere in Europe. This has earned the Premier League clubs a huge and self-perpetuating advantage over continental peers in terms of attracting playing talent. The security of world leading revenues, now augmented with sustained profitability, aided by cost control measures in place for both domestic and European competitions, makes clubs playing in the Premier League, and those with aspirations to get there, particularly attractive to investors from around the globe.”

End

Notes to editors

 

2014/15
(£ billion)

2013/14
(£ billion)

Revenue

3.4

3.3

Wage costs

(2.0)

(1.9)

Other operating costs

(0.9)

(0.8)

Operating profit/(loss)

0.5

0.6

Net player trading

(0.3)

(0.3)

Other costs/income

(0.1)

(0.1)

Profit/(loss) before tax

0.1

0.2

Source: Deloitte analysis

The analysis of the financial results of Premier League clubs for 2014/15 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 20 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 early June, shortly after the end of the 2015/16 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 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

About Deloitte
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.

Member of Deloitte Touche Tohmatsu Limited.

George Parrett
Deloitte LLP
+44 (0) 20 7007 7285
gparrett@deloitte.co.uk

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