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Premier League Revenues Grow But Losses Return

Thu 20th Apr 2017 | Money & Finance

Premier League clubs’ revenues increased to a new record of £3.6bn in 2015/16, according to Deloitte, the business advisory firm.

Analysis of the financial results of Premier League clubs for 2015/16 shows 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 £0.5 billion (2014/15: £0.5 billion).

The figures come ahead of the next edition of the Deloitte Annual Review of Football Finance to be published in June 2017, shortly after the end of the 2016/17 season.

Dan Jones, partner and head of the Sports Business Group at Deloitte, commented: “The 2015-16 season saw Premier League clubs grow revenues by almost 10% to £3.6bn, with the two Manchester clubs alone responsible for more than 50% of the increase.

“Manchester United’s participation in the 2015/16 UEFA Champions League, coupled with continued strong commercial revenue growth, resulted in a 30% increase in revenue to £515m.

“This saw them top the Deloitte Football Money League for the first time since 2003/04, as the world’s highest revenue-generating club.

“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.”

A combination of 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.

Jones added: “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.”

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 £1.4 billion – eclipsing the previous record set in 2015/16 by one-third and far exceeding any other league in world football.”

Action Images via Reuters / John Sibley

Posted by: Aaron Gourley 

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