By Paul Nicholson
July 12 – English football has never had it so good as Deloitte’s Annual Review of Football Finance shows total revenue for the 92 league clubs hitting a record £4.4bn for the 2015/16 season.
But is not an evenly distributed wealth with the figures showing that the Premier League’s 20 clubs made up £3.6 million of that figure, a 9% increase on the previous year and still a year before the bumper new TV deal is taken account.
While the Premier League is the honey pot, Championship clubs are showing record spending levels in a bid to get there. That spending is part fuelled by overall revenues increasing to a new record level of £556 million in 2015/16 – a rise of 74% in the last decade.
However, Deloittes point out this is the third time in the last four years clubs spent more on wages (£561 million) than they generated in revenue.
“With clubs standing to earn a revenue uplift of at least £170 million from promotion to the Premier League, rising to over £290 million if they survive one season, Championship clubs continue to be tempted to spend excessively relative to their revenues, particularly on wages,” said Adam Bull, Senior Consultant in the Sports Business Group at Deloitte.
Bull says that being the biggest spender on players and wages is no guarantee of promotion. “Huddersfield Town’s promotion at the end of the 2016/17 season again demonstrated the opportunity for any Championship club to reach the Premier League, regardless of their budget. Indeed, Huddersfield became the eighth club in the last five seasons to win promotion without the aid of parachute payments, and in 2015/16 had the Championship’s fourth-lowest wage costs.”
It is the Premier League economic power that continues to dominate and impress. “Each club generated more on average (£182m) than all 22 top division clubs combined managed in 1991/92 – the final season before the competition began,” says the report.
The bulk of this growth is driven by broadcast revenue at £1.9 billion, more than half the total revenue figure and almost double that of 2008.09.
Dan Jones, partner in the Sports Business Group at Deloitte, said: “Even in the final year of its old broadcast contracts, Premier League revenues continued to set new records…With the commencement of the new Premier League broadcast rights cycle in 2016/17, supported by new commercial agreements at clubs and matchday revenue growth from new and expanded stadia, we expect total Premier League clubs’ revenues to rise to over £4.5 billion in 2017/18.”
The report does find that wage costs in the Premier League increased by 12% to £2.3 billion, but this didn’t stop Premier League clubs recorded a third consecutive season of operating profits in excess of £500 million. That is a combined operating profit of more than £1.6 billion over the past three seasons, more than they managed in total over the previous 16 seasons combined.
The financial success of the football business is also good news for the government treasury, with the 92 clubs in the Premier League and Football League paying £1.6 billion in taxes.
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