Premier League clubs are on the verge of breaking billions of pound record in transfer window, says Deloitte.
According to Deloitte, it was revealed that the Premier League earned £1.5bn more than the Bundesliga in 2014/2015.
Increasingly large TV deals are helping English Premier League clubs to enter a strong and sustained financial performance.
It says the current TV deals saw Premier League clubs generate £3.3bn record revenues in 2014-15, up by 3%.
Top-flight clubs also recorded a second straight year of pre-tax profits in 2014-15, for the first time since 1999.
The report shows that the English football is breaking all kinds of financial records and only looks set to grow further according to reports revealed by top financial and auditing firm, Deloitte in its Annual Review of Football Finance for 2016.
The financial services and consultancy firm summed up the incredible pace of the Premier League’s revenue growth since its inaugural review in 1992 with the following stat:
By half-time of the second Premier League game that is televised domestically in 2016/17, more broadcast revenue will have been generated than by all the First Division matches combined 25 years ago.
That was just the first eye-catching fact rolled out as Deloitte analysed the 2014/15 season and offered forecasts for the future.
The Premier League clubs earnings in 2014/15 generated record revenue of £3.3 billion with a projection to rise to £4.3bn next year.
Clubs’ wage costs increased by 7% to exceed £2bn for the first time.
Clubs’ revenues were more than €2bn (£1.5bn) higher than the next highest-earning league, Germany’s Bundesliga.
Combined with the Football League, the top four tiers in English football took in a record £4bn.
Further records will be broken, particularly at the top.
From 2016/2017, clubs will enjoy the fruits of the record £.5.1bn paid out by Sky and BT Sport for live Premier League TV rights for three seasons.
The 92 clubs in the English Premier League and Football League generated more than £4bn in revenues for the first time in 2014-15, a new record.
Meanwhile, the UK government’s tax takes from the top 92 professional football clubs in 2014-15 was roughly £1.5bn, up from £1.4bn the previous season.
Deloitte’s review of football finance also found that combined revenue for the “big five” European leagues (England, Germany, Spain, Italy, and France) rose 6% to a record €12bn (£9.2bn) in 2014-15.
While the Premier League, Bundesliga and Spain’s La Liga were profitable, Italy’s Serie A and France’s Ligue 1 generated combined operating losses.
In England’s second tier, the Championship, combined revenues grew 12% to £548m in 2014-15, exceeding £500m 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,” said Deloitte.
“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.”
In Scotland, Celtic’s failure to qualify for the group stages of the Champions League contributed to a fall in Premiership clubs’ aggregate revenues of 9%, or some £13m.
However, the Glasgow club still accounted for 50% of all revenues in the division, as they lifted the title for a fourth successive year.
Deloitte said a new deal to market the international (non EEA – European Economic Area) TV rights meant Scottish football was now being shown in more than 100 countries.
At the launch of the review, Dan Jones of Sport Business Group said:
“What we are seeing is a continuation of club profitability, it is certainly not a one-off.
“We feel Premier League clubs have turned the corner, and are entering a new era of sustained profitability. Clubs are now attractive propositions to investors, and not merely as vanity projects”.
Jones also noted that this increased profitability means that PL clubs could compete with overseas team for the signatures of the world’s best players, and still have money left over.
Of course, this is already happening. And if it’s transfer action you want to fill those summer months, Deloitte thinks you’ll get it:
Premier League clubs are likely to spend over £1 billion in the 2016 summer transfer window.
The summer 2015 window is currently the biggest ever, with the movement of the likes of Anthony Martial and Kevin De Bruyne costing £870m.
Premier League matchday revenues now account for about one-fifth of club revenues.
Clubs’ combined gross spending to acquire players was a record-high of £1.1bn
Clubs’ net debt remained at £2.4bn with interest-free soft loans, usually from owners, accounting for 75% of the total.
Anthony Nlebem
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