Premier League club revenues up nearly £1bn on back of TV deals last season
The clubs in English soccer’s top-tier Premier League generated record combined turnover of £4.5 billion ($6.3 billion) in the 2016-17 season, according to new analysis from Deloitte, the professional services firm.
The 25-per-cent rise from £3.6 billion in the 2015-16 campaign was facilitated by new domestic and international broadcast deals worth more than £8 billion, including £5.14 billion from UK live rights agreements with pay-television operators Sky and BT Sport.
Deloitte calculated collective pre-tax profit at £500 million, another record, and almost three times the previous high of £200 million in 2013-14.
Combined operating profits doubled to a new high of £1 billion in the Premier League in 2016-17, when Chelsea were crowned champions for the second time in three years.
Wage costs rose by 9 per cent to a record £2.5 billion although the growth was significantly less than that of revenues.
This helps explain why all 20 clubs posted an operating profit and 18 reported a pre-tax profit. The revenue to wage ratio fell from 63 per cent to 55 per cent, the lowest figure since the 1997-98 season.
Dan Jones, partner and head of the Sports Business Group at Deloitte, said today: “This relative restraint from Premier League clubs reflects both the extent of their financial advantage over other leagues and the impact of domestic and European cost control measures.”
It was noted that the clubs have collectively made a pre-tax profit in three of the last four years, with the combined loss of £100 million in 2015-16 attributed to a small number of one-off exceptional costs, and they are expected to remain in the black going forward.
Sky (five packages totaling 128 matches per season) and BT Sport (two packages totaling 32 matches per season) have already retained premium live rights for three years starting in 2019-20 in deals worth a total of £4.46 billion, albeit this is down £700 million on the amount they shelled out in the last auction.
Two packages comprising 40 live games per season for the next cycle are still to be sold.
Reflecting on the findings, Jones said: “Although we anticipate wage costs will continue to rise in the coming seasons, we do not foresee increases to be at a level which can jeopardise the profitability of the Premier League as a whole. The most significant wage increases have tended to occur in the year prior to the commencement of a new broadcast cycle once a substantial revenue increase is secured.
“Despite the lack of growth in domestic broadcast deals announced to date, we still expect to see overall revenue growth in the coming seasons, and if this is complemented with prudent cost control, we expect that pre-tax profits will be achieved for the foreseeable future.”