The fall in the value of the pound after the Brexit referendum has hit the Premier League hard. A pre-tax loss of £312m is expected to be announced this week.
For many years the TV contracts that have fuelled the league’s boom have been paid in sterling, dollars and euros with the company paying the league clubs in sterling and using derivatives to manage the exchange rate risk. However, the accounting rules for reporting derivatives have changed.
The fall in the value of the pound after the Brexit referendum has hit the Premier League hard. A pre-tax loss of £312m is expected to be announced this week.
For many years the TV contracts that have fuelled the league’s boom have been paid in sterling, dollars and euros with the company paying the league clubs in sterling and using derivatives to manage the exchange rate risk. However, the accounting rules for reporting derivatives have changed.
The 12 per cent decline in the value of the pound to the end of the Premier League’s financial year turned what would have been a gain of £638,000 under the old standards to a paper loss of £250m. The Premier League insisted the figure had no impact on its real income or operations, or its ability to pay clubs.
Revenues continue to increase reaching £2.04bn, up from £1.99bn. This figure will increase this year with the new domestic television rights deal.