Leicester City lead Midlands revenue rich list

Surprise Premier League champions Leicester City registered the highest revenues amongst the Midlands’ top football teams in their triumphant season, latest figures on football’s elite have shown.

The Foxes pipped Aston Villa, who in their final season (2015/16) in the top flight still managed to be the 13th richest club in the country.

The 26th Annual Review of Football Finance from the Sports Business Group at Deloitte shows Leicester City’s £129m – a 24% rise on the previous season – placed it eighth in the list of the list of revenue earners within the 92 Premier League and Football League clubs.

What is surprising about Villa’s performance – and is perhaps symbolic of the final throes of the Randy Lerner era –  is that the club had the highest wage costs to revenue ratio (88%) of any club in the Premier League.

Despite the club’s abysmal performance in its relegation season, it still managed to generate revenues of £106m, although this was down 7% on the previous season.

The Deloitte review shows the 18 Midlands Premier League and Football League clubs generated record total revenues of £565m for the 2015/16 season – 13% of the £4.4bn generated by the 92 clubs combined.

Wage costs for the Midlands clubs were £461m.

The Leicester City fairy tale was also achieved with wage costs of just £80m, a pittance compared to some in the top flight. It meant then club outperformed their wage spending to an extent never before achieved in the Premier League.

In total, the four Midlands Premier League teams (Aston Villa, Leicester City, Stoke City and West Bromwich Albion) generated combined operating profits of £17m – despite Villa recording the highest operating loss (£23m) in the division.

The Midlands’ four Championship clubs (Birmingham City, Derby County, Nottingham Forest and Wolverhampton Wanderers) had a combined operating loss of £57m, with Derby reporting the highest operating loss (£24m) in the division.

In contrast, prudent financial management by the then Steve Morgan-owned Wolves saw the Molineux club become the only Championship side to record a pre-tax profit, driven by a £10m profit on player sales.

League attendances amongst the Midlands sides totalled 5.5m, with Villa the best supported club with average weekly gates of 33,732. However, at 79%, they were one of only two Premier League clubs whose stadium capacity utilisation was less than 90%, and it was the only club to utilise less than 80% capacity.

Nationally, premier League clubs generated record revenues of £3.6bn in what was, the final year before the start of the new broadcast deals in 2016/17.

Despite wage costs increasing by 12% to £2.3bn, Premier League clubs recorded a third consecutive season of operating profits in excess of £500m, to record combined operating profits of more than £1.6bn over the past three seasons, more than they managed in total over the previous 16 seasons combined.

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. In the 2015/16 season, the ‘big six’ clubs participated in the group stages of UEFA competitions and benefitted from improved UEFA broadcast rights deals, which resulted in an increase in distributions to participating English clubs of around £100m.”

Other key findings of the review were:
·       Total European football market revenues reached almost €25bn in 2015/16, a 13% increase on 2014/15, driven by continued growth in broadcast rights values in European football’s biggest leagues, and the impact of UEFA Euro 2016;
·       The ‘big five’ European leagues grew collective revenues by €1.4bn (12%) to a record €13.4bn in 2015/16, with all five leagues exhibiting revenue growth on the previous season;
·       Premier League clubs spent a record £1.3bn on transfers during the 2015/16 season, surpassing the previous season’s record of £1.1bn by more than 20%;
·       Total Premier League net debt fell for the third consecutive season, by £125m (5%) to £2.2bn; and
·       The 92 clubs contributed £1.6bn to Government in taxes in 2015/16 (2014/15: £1.5bn).

Whilst Premier League clubs returned to a collective pre-tax loss in 2015/16, it is unlikely to be a lasting trend.

Mr Jones added: “The return to pre-tax losses in 2015/16 was the result of exceptional, or one-off, accounting adjustments, without which clubs collectively would have broken even. Operating profits exceeded £500m for the third season in a row and we fully expect that Premier League clubs will collectively achieve record levels of profitability in the seasons to come.”

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