As the English football season draws to a close, Premier League clubs scored a new record of £3.6bn in revenues last year, but also fell into the red with an aggregate pre-tax loss of around £110m, according to research from Deloitte
The firm says Premier League club revenues rose by 9% in 2015/26 with two clubs – Manchester United and Manchester City – responsible for more than 50% of the increase.
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 £500m, the same as in 2014/15.
However, a combination of the 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.
Dan Jones, partner and head of the Sports Business Group at Deloitte, said: ‘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.’
Manchester United are top of the Deloitte Football Money League for the first time since 2003/04, as the world’s highest revenue-generating club. Participation in the 2015/16 UEFA Champions League, coupled with continued strong commercial revenue growth, resulted in a 30% increase in revenue to £515m.
Jones said: ‘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.’
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 £1.4bn – eclipsing the previous record set in 2015/16 by one-third and far exceeding any other league in world football.’