TV deal sees English Premier League’s pre-tax profits double in three years to record high
Broadcast billions mean increased wages don’t affect profits, even for clubs struggling on the pitch: Deloitte report
England’s Premier League soccer teams made a collective pre-tax profit of half a billion pounds in the 2016-17 season, more than doubling the previous record set three years earlier, according to Deloitte’s Sports Business Group.
Revenue was boosted by a broadcast deal that poured in £5.1 billion (US$7.3 billion) over three years. That was up from a previous, £3 billion-pound arrangement, a rate of growth that outpaced even soccer stars’ escalating pay.
With wages increasing by 9 per cent, to £2.5 billion, in 2016-17, “this increase is nowhere near the level of revenue growth noted,” said Dan Jones, partner and head of Deloitte’s Sports Business Group.
More positively, #LFC had the 9th highest revenue in the world in 2016/17 per the Deloitte Money League, just ahead of Juventus. This was largely due to the impact of the new Premier League TV deal. pic.twitter.com/48389m1DMS
— Swiss Ramble (@SwissRamble) 12 March 2018
Deloitte says clubs have recorded a collective pre-tax profit in three of the last four years, making them more attractive to investors. Eighteen of the 20 clubs were profitable at a pre-tax level in 2016-17, the firm said.
Even clubs like West Ham, in the middle of the Premier League standings, are delivering solid earnings; it registered a profit of £43 million with the UK’s Companies House.
Another Premier League team, Southampton, was bought by Chinese owners last year. Newcastle United, owned by Sports Direct International Plc chief executive Mike Ashley, was put up for sale in the autumn, but the process was aborted when the club appeared to be in danger of relegation to England’s second-tier league.
— Match of the Day (@BBCMOTD) 23 January 2018
Broadcast revenue, which amounted to nearly £100 million in 2016-17 for the lowest Premier League club, drops to about 6 million in the lower league, the Championship. The three lowest-ranked teams are demoted every season, with three others advancing to the Premier League.
While club owners are looking at a possible reduction in domestic television income as a result of a new three-year rights arrangement that runs through 2022, they make a growing amount of revenue from overseas deals.