Deloitte review shows Europe's top leagues generated record £15bn during 2018/19 season
Wednesday 10 June 2020 23:55, UK
Premier League and EFL clubs contributed £2.3bn to HMRC in taxes and generated a record £6.2bn in revenue in 2018/19, according to Deloitte.
The 29th Annual Football Review of Football Finance from Deloitte's Sports Business Group also showed Europe's top five leagues generated a record £15bn during the 2018/19 season, up nine per cent on the previous year.
The European football market as a whole also generated record-breaking revenue, coming in at £25.5bn (€28.9 bn).
But the report forecasts a sharp decline in Premier League clubs' revenues in 2019/20 due to the impact of the COVID-19 pandemic, with some of the forecasted revenue for the period permanently lost.
"We expect the ongoing COVID-19 pandemic to cause significant revenue reduction and operating losses across European football in the current season's financial results," said Deloitte's Dan Jones.
"Clubs are having to weather multiple financial impacts, including rebates or deferrals of commercial and broadcast incomes, as well as the loss of match day income and other event-related revenue."
With that said, Premier League clubs' revenues are expected to hit a new record high in 2020/21, in part due to a deferral of some revenue from the 2019/20 financial year to 2020/21.
Jones added: "We forecast that the restart plans for the Premier League and a number of its peers will cause a rapid recovery in financial results as some 2019/20 broadcast revenues are pushed into the 2020/21 financial year, which may result in a bumper revenue year.
"Much remains uncertain, particularly around the timing and scale of the return of fans to stadiums and the impact on commercial and broadcast partners' wider businesses.
"The football industry will be hopeful that a V-shaped recovery and a return to relative financial normality for the 2021/22 season is possible."
The review showed Premier League clubs' revenues broke the £5bn barrier for the first time, amounting to £5.2bn in total for 2018-19, an increase of seven per cent, driven primarily by growth in UEFA distributions to English clubs.
Liverpool played Tottenham in the Champions League final in 2019, while Arsenal and Chelsea contested the Europa League final.
In revenue terms, the Premier League was 73 per cent larger than Spain's La Liga, which was its nearest competitor.
The combined aggregate operating profits of Premier League clubs slipped by 5 per cent to £824m in 2018/19 yet still represents the third-highest level of operating profitability recorded in the competition's history.
Premier League clubs made combined pre-tax losses of £165m in 2018/19 as the charge for amortisation of previous player acquisitions increased and net profit on player transfers fell.
The 72 Football League clubs earned revenues of over £1bn for the first time ever.
Championship clubs generated record combined revenues of £785m in 2018/19, a 5 per cent increase from 2017/18.
The wages to revenue ratio for English Championship clubs increased to a record 107 per cent, highlighting the rising level of financial risk that Championship clubs are willing to take in order to chase the rewards on offer for promotion to the Premier League.
Deloitte's Tim Bridge said: "The level of losses in the Championship has been a recurring concern for many years.
"Even before the financial impact caused by the pandemic, EFL clubs were typically sustained by owner largesse and/or the pursuit of uncertain and uncontrollable promotion or player transfer windfalls. Now is the time for serious action to address the issue of financial stability."
League One clubs had their highest ever aggregate revenues (£191m) and League Two matched its previous revenue record (£91m).
Deloitte, which has been involved in providing financial information to EFL clubs involved in discussions with players over wage deferrals and cuts, believes football can learn lessons from other sports, such as rugby union and Formula One.
"You wind the clock back 18 months, two years, everyone was saying how can we make it work (in Premiership rugby) and you then have the Saracens case and you see that actually these things have worked, they can have teeth, they can be enforced," Jones added.
"Formula One is the same, it's just introduced a new cost cap. It's a sport where that's been talked about forever as something that the sport needs and it's always been 'oh, it's too difficult, it's too complex, you can't do it'.
"I just think if Formula One can do it, if Premiership Rugby can do it, I don't see why the Championship can't do it. The need is more urgent and more long-standing in the Championship than it is even in those other sports."
