Premier League clubs slump into loss
Premier League clubs have made a combined loss for the first time in three years. Clubs in the Premier League posted combined revenues of £3.6bn for the 2015-16 season, a 9 per cent rise from the previous year, according to Deloitte.
However, spending on players has outpaced revenue growth. Wages increased 12 per cent to £2,3bn which along with other costs, such as splashing out on transfer fees, helped to push clubs into a combined pre-tax loss of £110m.
Clubs have increased their spending in anticipation of the cash windfall from the league's new £5.1bn domestic tv rights deal. About £1bn was spent on transfer fees in last summer's window.
Clubs have in fact made a combined loss for 15 of the last 17 seasons, but the combined profit achieved in the last two seasons had led to hopes of a new prudence. However, Deloitte does expect to see a return to profitability in 2016/17.
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.'