Football Clubs Generate £4bn In Revenues
Thu 2nd Jun 2016 | Money & Finance
The 92 Premier League and Football League clubs generated more than £4bn in revenues for the first time in 2014/15, according to the 25th Annual Review of Football Finance from the Sports Business Group at Deloitte.
Premier League clubs once again saw record revenues, generating £3.3bn of the total, largely due to the current broadcast rights cycle, which began in 2013/14.
This has helped clubs to record a second consecutive year of pre-tax profits in 2014/15, the first time this has happened since 1999.
In addition, the 92 clubs’ capital expenditure reached £305m, the most ever invested in a single season whilst a £1.5bn contribution to the UK's coffers was paid in tax to the government.
Dan Jones, Partner in the Sports Business Group at Deloitte, comments: “The pace of football’s financial growth in two and a half decades is staggering.
“By half-time of the second televised Premier League game next year, more broadcast revenue will have been generated than during the whole of the First Division season 25 years ago.
“It is particularly reassuring to see that clubs are looking to spend on improving stadia and infrastructure.
“The impact of the Premier League’s broadcast deal is clear to see. For the first time, the Premier League leads the football world in all three key revenue categories - commercial, matchday and broadcast - and this is driving sustainable profitability. When the enhanced new broadcast deals commence in the 2016/17 season, operating profits could rise as high as £1bn.”
In the Championship, combined revenues grew 12% to £548m in 2014/15, exceeding £0.5 billion for the first time. Wage costs rose by 4% to £541m which, despite a reduction in the wages/revenue ratio from 106% in 2013/14 to 99%, means clubs spent almost as much on wages as they generated in revenue.
This remains an unsustainable level of spending without the support of owner funding. This resulted in operating losses of £225m and a combined pre-tax loss of £191m.
Adam Bull, Senior Consultant in the Sports Business Group at Deloitte, commented: “With promotion to the top flight now worth at least an additional £170m to those Championship clubs not in receipt of a parachute payment, it is no surprise that clubs are doing all they can to put the best talent on the pitch in the hope of reaching the promised land of the Premier League.”
Bull continued: “At the same time, as none of the Championship clubs reported an operating profit in 2014/15 they need to be mindful that profits from player sales or owner funding are likely to be needed if they do not gain promotion.”
Image:Reuters / Andrew Yates Livepic
Posted by: Aaron Gourley
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