Premier League clubs have made their first collective profit for 15 years. Dan Jones, a partner at Deloitte’s authoritative Sports Business Group, hailed the news as a ‘transformative moment’. It showed that the Premier League could keep a grip on costs while still attracting top players. He commented, ‘You can still afford to compete on talent and still have money left at the bottom line.’
Premier League clubs have made their first collective profit for 15 years. Dan Jones, a partner at Deloitte’s authoritative Sports Business Group, hailed the news as a ‘transformative moment’. It showed that the Premier League could keep a grip on costs while still attracting top players. He commented, ‘You can still afford to compete on talent and still have money left at the bottom line.’
The combined pre-tax profit for the first time since the 1998-9 season reflected greater income as much as it did increased prudence. Last season saw the first year of revenues from the record £3bn three year television rights deal signed in 2012.
Pre-tax profits of £190m in the 2013-14 season were almost four times higher than the previous record of £49m in 1997-98. However, they should be seen in the context of losses of £2.6bn over the past decade.
There are signs of increased progress in getting wages under control. Wage costs rose just 6 per cent to £1.9bn as the wage/revenue ratio fell from a high of 71 per cent in the 2012-13 season to 58 per cent last season. Deloitte recommend a target figure of 50 per cent.
Dan Jones argued that the return to profitability was proof that Uefa’s financial fair play rules were controlling costs in the league. However, it could also be argued that clubs themselves were realising that the situation was not sustainable and that they were over paying for some players in both transfer fees and wages. Clubs like Chelsea are aiming for a break even target alongside success on the pitch.
A clear majority of clubs turned in pre-tax profits with Manchester United the best performer. In the five years to 2012-13, several clubs made big operating losses, including Aston Villa, Chelsea and Queens Park Rangers. Manchester City made the largest total loss at £221m.