Premier League gold mine continues; but sadly not much longer for Villa
ENGLISH Premier League clubs have recorded a second consecutive year of aggregate pre-tax profits, for the first time in almost 20 years.
Latest figures from Deloitte show clubs generated approximately £120m in 2014/15. This is the second highest-ever aggregate pre-tax profit for the top flight of English football 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.
The figures help to illustrate just how much of an impact relegation to the Championship can be for a club; a fate likely to befall Aston Villa tomorrow.
They also underline why foreign investors are so keen to get involved with the English game.
2014/15 Statistics:
• 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
Dan Jones, Partner in the Sports Business Group at Deloitte, said: “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 also revealed 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 10 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.”
