Premier clubs in £110m losses despite £3.6bn revenue

English Premier League clubs’ aggregate revenues increased 9% to a record of £3.6 billion in 2015-16 — but the clubs made combined pre-tax losses of £110 million — according to business advisory firm Deloitte.

Wage costs increased by 12% to £2.3 billion, resulting in combined operating profits — excluding player trading, net interest charges and amortisation of player contracts — of £500 million.

Dan Jones, partner and head of the Sports Business Group at Deloitte, said: “The 2015-16 season saw Premier League clubs grow revenues by almost 10% to £3.6 billion, 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 £515 million.

“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.”

Deloitte said a combination of increased wage costs and increased amortisation charges — arising from Premier League clubs’ then record transfer expenditure in the summer 2015 transfer window — and £110 million of exceptional costs resulted in the aggregate pre-tax loss of around £110 million, 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.”