Category: Premier League

2018 was another thrilling season with Manchester City blowing away all competition to take the Premier League crown with ease. At the bottom of the table mainstays Swansea, Stoke and West Brom met their doom with relegation.

However, this article is about finances, and more specifically revenue and which clubs are bringing in the cash.

Revenue increased from an eye-watering £4.3bn to an even more outstanding £4.8bn, a more than half a billion rise in income and a 12% growth rate!

This is largely driven by the ever-increasing commercial appeal of the Premier League and improved performances in Europe by the top 6, further increasing the financial gap between the elite and the mid-table clubs.

The average revenue of a Premier League club is a cool £240m. This average shoots up to a jaw-dropping £460m among the top 6, showing how uneven the revenue is across the league and the near-impossible challenge of competing with their ever-growing riches.

Revenue Growth

As mentioned above, revenue grew by 12% to £4.8bn, as matchday (7%), commercial (12%) and broadcasting (13%) all experienced good levels of growth as the Premier League continues to grow richer.

Interestingly, the growth isn’t uniform across clubs, with 7 of the 20 teams experiencing a decline in revenue, largely due to performances on the pitch rather than commercial reasons.

The biggest movers were of course the promoted clubs, with Huddersfield experiencing growth of 734% as revenue increased from £15m to £124m after they successfully survived their first season in the Premier League against the odds.

Brighton also saw revenue grow by 399% from £28m to £138m, also surviving on their return to the Premier League.

Newcastle experienced only a doubling in revenue due to only being relegated the season prior, with revenue growing from £83m to an impressive £177m (114%) as they completed a clean sweep of survivals by the three promoted clubs.

Outside of this, the major movers were Liverpool (25%) and Tottenham (23%), whose performances in Europe and domestically saw a huge uptake in their revenues and led to huge profits too. Tottenham also benefitted from a season at Wembley which saw matchday revenue grow by 57% while Liverpool’s run to the Champions League Final helped them net an extra 43% in broadcasting revenue.

On the other end of the scale, Leicester saw the biggest decline in revenue, suffering from a European hangover after their one-time Champions League campaign ended with revenue falling from £231m to £158m (32%).

Arsenal suffered a dip of 9% to fall back below £400m in revenue (£386m) on the back of a less than successful season in Wenger’s final year as boss.

West Brom’s relegation saw their revenue drop by 9% to £125m as they fell from mid table to rock-bottom.

Matchday Money

Matchday revenue is gradually becoming a smaller portion of top clubs’ revenue as they see commercial and broadcasting revenue sky rocket on the back of lucrative commercial sponsors and growing prize money.

Matchday revenue in the Premier League increased from £629m to £671m (7%) with the majority experiencing a small level of growth as ticket prices remained fairly static.

Manchester United brought in the most matchday income by a distance as the Theatre of Dreams continues to be the largest club stadium (Wembley being occupied by Spurs an exception), helping United bring home £110m, the only club in triple digits.

They are followed by Arsenal (£99m), Liverpool (£81m), Chelsea (£74m) and Tottenham (£71m) as fans flooded in to see their top teams play and compete for honours.

Manchester City lag their rivals in this area, bringing in only £57m due to a smaller stadium and the notorious empty seats rival fans taunt City about.

Outside the Top 6, Newcastle (£24m), Brighton (£19m), Southampton (£19m) and Everton (£16m) are the only clubs to have revenue from matchdays in excess of £15m, showing the gulf between the top 6 and the rest.

On the other end of the scale, Huddersfield take home a lowly £5m in matchday taking due to their 24,000-seater stadium and well-priced tickets which do no exclude anyone, something that should be commended.

Bournemouth (£7m), Swansea (£7m), West Brom (£7m), Burnley (£8m) and Watford (£8m) all had matchday revenue below £10m. Any growth is constrained by stadium size and price elasticities; therefore, it is unlikely these numbers will exceed £10m anytime soon.

TV Money

Broadcasting revenue makes up the majority of Premier League clubs’ revenue, accounting for 59% of revenue and this only increases when excluding the top 6, with the Premier League prize the major source to the lower clubs that treasure survival as everything.

Broadcasting revenue increased from £2.5bn to £2.8bn (13%) as improved performance in Europe and a slight increase in Premier League distributions the major cause for this.

Liverpool were kings of broadcasting revenue and nearly Kings of Europe as their run to the Champions League final and 4^th placed finish boosting their broadcasting revenue to £220m.

They were closely followed by Manchester City (£211m), Chelsea (£204m), Manchester United (£204m) and Tottenham (£201m), with Arsenal lagging their rivals at £180m after a disappointing campaign.

Among the rest of the league they all vary between Everton at £130m and West Brom at £102m, primarily due to Premier League prize money based on final league performances, with the majority failing to enjoy lengthy cup runs (which do not boost revenue considerably anyway).

Europe is the big differentiator here, with a £90-118m gap down predominately to the lack of European adventures among those outside the top 6, showcased by Leicester seeing their broadcasting revenue drop from £191m to £124m!

The promoted clubs saw their broadcasting revenue rocket, with rises of £102m, 102m and £79m for Brighton, Huddersfield and Newcastle respectively, showcasing the riches available in the Premier League.

Liverpool are likely to once again lead in this category after going one step further and secure their sixth European title and will be closely followed by treble winning Manchester City and Europa League winners Chelsea, who incidentally are the top three in the Premier League this season.

Commercial Cash

Commercial revenue continues to grow in importance for clubs as they looked to find other ways to pad their pockets. Commercial revenue grew by 12% to £1.3bn as companies continue to see value in the Premier League as a global stage for their brands.

Manchester United is a league of their own in this regard, taking home an impressive £276m from corporate partners as the biggest brand in English football continues to pull in the commercial cash despite falling on harder times on the pitch as of late.

They are being chased heavily by their Manchester rivals who have seen a commercial drive prove successful, taking their commercial revenue to £233m.

Their top 6 rivals lag significantly here with Chelsea (£170m), Liverpool (£154m), Tottenham (£109m) and Arsenal (£107m) all having room for improvement. Liverpool seem best placed to challenge the Manchester clubs after a return to prominence was capped off with the Champions League trophy in 2019 which will surely boost their profile and commercial revenue to new heights.

Everton (£43m), West Ham (£25m) and Newcastle (£24m) are the next biggest in a commercial sense due to their history, however they still lag the top 6 by huge amounts that make the ability to compete near on impossible.

Meanwhile, the three ‘Bs’, Bournemouth (£8m), Brighton (£9m) and Burnley (£9m) are the only clubs in single digits, however we would expect these teams to join their rivals by pushing past £10m in 2019.

Manchester United are likely to maintain a narrow lead of Manchester City in commercial terms next season, however the gap will close further.

Liverpool and Chelsea are likely to push close to the £200m barrier, while Tottenham are likely to increase their lead over their North London rivals after another good season.

Everton are likely to fall just short of the £50m mark while Leicester (£21m) are likely to overtake both Newcastle and West Ham as their profile continues to grow.

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2018 was another thrilling season with Manchester City brushing away all competition to take the crown with ease. At the bottom of the table mainstays Swansea, Stoke and West Brom met their doom with relegation.

However, this article is about finances, and more specifically wages and which clubs are spending the big bucks.

The 2017/18 season saw record levels of wages as the year on year growth in player salaries continued due to the riches of the Premier League reach new heights.

Wages increased from an eye-watering £2.5bn to an even more outstanding £2.8bn, a 15% increase and the equivalent of an extra £7.2m a week in wages! 

This is largely driven by the mounting riches of remaining a Premier League club among the lesser teams and the need to compete in Europe and for trophies among the top 6.

The average wage bill of a Premier League club is £142m (or £2.7m a week). The average of the top 6 on its own is a jaw-dropping £242m (£4.7m a week), showing the vast difference financially between those at the top and the rest.

And despite the TV deal money stagnating in the most recent deal cycle, wage growth shows no sign of slowing down as clubs clamber to grab a share of the rising commercial revenue up for grabs.

The Big Spenders

The big wage spenders in 2018 were all up north, with Manchester United (£296m), Liverpool (£264m) and Manchester City (£260m) all spending in excess of £250m on wages (more than £4.8m a week).

Liverpool were the surprised package here as they began to make a concerted push to move back on their perch with big new signings such as Van Dijk and lucrative new deals for the likes of Salah, Mane, Firmino and co. that have so far been successfully.

Manchester City surprisingly saw a slight dip in their wage spend as incoming signings’ wages were recouped by selling and releasing deadwood.

Manchester United continued flexing their financial muscle, outgunning their neighbours to sign Sanchez on a mega deal which they are no doubt regretting. This added to an already bloated wage structure that continues to cause them trouble in discussions of new deals with the likes of Rashford and De Gea, who refuse to accept less than some of their underperforming team mates.

Tight Purse Strings

The paupers of the Premier League this year happened to be Huddersfield (£63m), Brighton (£78m) and Burnley (£82m) who all spent less than a third of what the big spending Scousers and Mancunians spent.

Outstandingly, all three of these clubs survived on their modest budgets, showing it’s not all about money, particularly Burnley who finished 7^th, 11 places higher than their position in the wages table.

The low wages did however catch up to these clubs in 2019, with all three struggling near the foot of the table and Huddersfield were unable to stay afloat and fell to relegation, showing that maybe low wages are not sustainable over the long term. 

Best of the Rest

Everyone else is somewhere in between this gulf and we are going to have a look at a few of the more notable wage bills.

Tottenham continue to mix with the heavyweights on a featherweight’s diet, managing to maintain a wage budget of £148m more than £100m less than Manchester United, Liverpool and Manchester City and nearly £100m less than their London rivals Arsenal (£240m) and Chelsea (£246m).

It’s worth also noting the increased ambition shown on the blue side of Merseyside with Everton’s wages approaching the same level as Tottenham at £146m, hoping to replicate the success Tottenham have had, although that is yet to materialise.

Bournemouth and West Ham both broke the £100m wage barrier for the first time, spending £102m and £107m respectively as they both looked to move up the table and consolidate their Premier League status.

The three relegated clubs were near the bottom of the wage tree, with Swansea (£91m), West Brom (£92m) and Stoke (£94m) all spending less than a £100m on wages, a figure that will fall dramatically reduce following their relegations.

Wage Growth

All bar two clubs (Manchester City and Newcastle) saw a growth in their wages. 

Huddersfield were the big movers with wages nearly tripling from £22m to £63m (188%) on the back of promotion. Given the unexpected nature of their promotion due to their modest Championship budget, this increase was necessary and still left them firmly at the bottom of the wage bills in the Premier League despite an extra £786k per week in wages.

Another promoted club in Brighton also saw a huge rise in wages, almost doubling from £40m to £78m (92%) in order to compete in the ultra-competitive Premier League, an extra £715k a week. 

Newcastle on the other hand already had a bloated wage bill following their relegation to the Championship and continued to trim the wages despite promotion as Mike Ashley looked to make it an attractive target as wages dropped from £112m to £94m (16%).

Bournemouth continued to grow as a club, spending an extra £585k a week, increasing their wages from £72m to £102m (42%). The same was the case for Burnley, who increased their wages from £61m to £82m (34%) as they consolidated their Premier League status.

Everton’s ambitions were shown by spending an extra £785k a week on wages, increasing their wages from £105m to £146m (39%), although the benefits are yet to be forthcoming under Marco Silva.

Liverpool were the big movers among the top 6 spending an unprecedented extra £1.1m a week in wages, while Arsenal (£783k a week), Chelsea (£479k a week) and United (£623k a week) were all free spending in 2018.

Financial Stability

The wage to revenue ratio measures financial sustainability and prudence. If the ratio exceeds 100%, a club is spending more on wages than the revenue they bring in, which means the club is loss making before taking into all other costs they face, a situation that will lead to financial ruin in the long run.

The higher the ratio, the less profitable a club can be and the less sustainable they are. A club’s wage/turnover ratio should be around 60%, with one higher than 90% largely unsustainable and one lower than 40% a poor use of resources and essentially ‘too safe’.

The average in the Premier League was 63% in 2018, ranging from 39% to 78%.

Tottenham were the lowest at 39%, with the prudent Daniel Levy taking tight to new levels, although the low ratio is partly due to a huge upturn in revenue that diluted the ratio significantly. New deals for Alli and Kane among others will see this ratio rise closer to 50% (although 2019 revenue is expected to rise), while they also have to manage finances due to their new stadium.

The top 6 continue to run financially smoothly despite their huge wage bills with Manchester United (50%), Manchester City (52%), Chelsea (55%), Liverpool (58%) and Arsenal (60%) all having ratios of less than 60% due to their high revenue which justifies their star players’ salaries.

The Promoted clubs were also in a healthy range with Huddersfield (50%), Newcatle (53%) and Brighton (56%) all in the 50s as the huge boost in revenue exceeded their rising wages (or falling wages in Newcastle’s unusual case).

Outside of this and among the mid table gang, the majority of ratios exceed 70%, a poor place to be in. Crystal Palace (78%), Everton (77%), Bournemouth (76%), Leicester (75%), Southampton (74%), West Brom (74%) and Swansea (71%) are all approaching the financial risk area.

Burnley’s ratio can be explained by bonuses following a great season but not much can be said for those outside this.

West Brom, Stoke and Swansea will need to drop wages fast to avoid financially issues following relegation with large losses on the cards if not.

Bournemouth and Southampton must be careful to not over exert themselves financially in a bid to survive and grow and make smart investments or risk financially ruin.

Everton need to trust that they are making the right moves and that revenue catches up with their rising wages soon to avoid the need to sell key players or revert to a much smaller budget and level of ambition.

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Have a look at the finances of all Premier League clubs from the 2017/18 season!

Find your club and share with a friend!

Arsenal – Wenger Out, Cash Still In

Bournemouth – Howe You Doin’?

Brighton – Seagulls Soaring

Burnley – Moor Profits

Chelsea – Russian Roulette

Crystal Palace – No Transfers, No Profits

Everton – Merseyside Blues

Huddersfield – Premier Profits

Leicester City – European Hangover

Liverpool – Klopping Profits

Manchester City – Guardiola-Sized Gains

Manchester United – Strong and Stable Leadership

Newcastle United – Promotion Pays

Southampton – Virgil Van Profits

Stoke – Cold, Wet and Windy

Swansea – Sinking Swans

Tottenham – World Record Profits

Watford – Mixed (Marco) Bag

West Brom – Red & Relegated

West Ham – Hammered

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The 2017/18 Premier League season saw a cluster of clubs turn profitable, with 11 of the 20 clubs competing in the competition earning a profit.

The cumulative profits realised were a high £285m, an average of £14m per club. However, this doesn’t tell the story at all with huge variances among teams, from a record breaking £113m profit (Tottenham) to a loss of £37m (Manchester United).

The top 6 unsurprisingly led the way, accounting for £274m of the profits, 96% of the total Premier League profits. The rest account for £11m of profits, due to the huge variances in financial fortune among the rest of the pack.

There is no real correlation in terms of profit and league positions, other than at both extremes of the table, with 5 of the top 6 being profitable and all three relegated clubs turning in a loss.

The vast majority of profits were due to clubs recording large profits on players sales after several high-profile players departed the Premier League. Such transfer windows are not common place and these clubs may see a steep fall in profits without these sales.

In 2018, profits outside the top 6 related predominately to an ability to keep costs down, while a couple of clubs also benefitted from relatively sizeable commercial and matchday revenue.

This article will look into the those who performed well and those who didn’t and the main reasons behind this, before finishing with a look at how things may look for the 2018/19 season.

Let’s delve into the numbers.

Top of The Profits

It was a good year for Tottenham (£113m), Liverpool (£106m) and Arsenal (£56m) who were the top three performing clubs from a profit (after tax) perspective, and all members of the illustrious top six.

Tottenham broke Liverpool’s short lived record profit figure for a football club following the release of their accounts after the sales of the likes Walker, Wimmer and Bentaleb helped Tottenham records a profit on player sales of £73m, 65% of their total profits.

Liverpool had Coutinho to thank for their huge profit after recording a huge profit on player sales of £124m, more than their after-tax profit but slightly less than their profit before tax (£125m).

Arsenal would have been loss making had it no been for their profit on player sales of £120m, due to a flurry of sales including Oxlade-Chamberlain, Walcott, Giroud, Coquelin and Szczesny plus many more.

Tottenham were further helped by revenue growth of £71m (23%) to a personal high of £381m, primarily due to their temporary move to Wembley and the commencement of their new Nike sponsorship deal.

Liverpool benefitted hugely from a run to the Champions League Final and a great Premier League campaign which saw revenue increase by £90m (25%) to £455m.

It was the opposite for Arsenal whose profits were entirely down to player sales with a loss being recorded without these sales as revenue fell by £21m (5%) after a season without Champions League football.

Tottenham had a lack of any real transfer activity this season and as such, profit on player sales will be small, however a run to the Champions League Final and the potential trophy itself will see profits remain relatively high, although lower than this year.

Liverpool also saw a huge dip in transfer departures of a high-profile nature, and as such profits will take a large hit. Another Champions League final and an improved Premier League campaign will offset some of this, however due to rising costs, profits are likely to be nowhere near 2018 levels.

Arsenal likewise saw minimal player sales and will be fortunate if they don’t record a loss, even if there is Europa League glory at this month.

Take the L

It was a bad year for Manchester United (£37m), Crystal Palace (£33m) and Stoke (£32m) who all recorded rather large losses that will not please their bosses.

Manchester United can partly be excused with loss solely down to US Tax and accounting hocus pocus with Manchester United recording a £26m profit before tax. This loss isn’t a real loss and reflects accounting adjustments rather than a cash loss.

The same cannot be said for Crystal Palace, who made a £10m profit in 2017 due to player sales that were lacking in 2018. Despite revenue rising by 5% to £150m, Crystal Palace saw costs rise 11% to £187m as Crystal Palace struggled to stay competitive while keeping costs low.

The same can be said for Stoke that will be unhappier with relegation than the loss (which will grow even larger following relegation). Revenue fell due to a poor campaign by 9% to £127m while costs rose 33% to £180m, a double whammy their financial health didn’t enjoy.

This year, we are likely to see one of the largest losses in Premier League history with Fulham relegated after a £100m+ spend which will see huge impairment losses as players leave for a fraction of the transfer fees spent.

Cardiff and Huddersfield are unlikely to see huge losses due to relatively low costs despite relegation.

Crystal Palace are likely to keep their place near the bottom of the profits table with another loss following another year of low player sales.

No Sales, No profits

Premier League clubs sold a whole host of talent in 2018, some to other Premier League clubs but also a large portion of players went abroad.

Premier League clubs recorded profits on these sales of an eye-watering £836m, an average of £42m per club although the amounts vary greatly from club to club.

Leading the way were Liverpool (£124m), Arsenal (£120m), Everton (£88m) and Tottenham (£73m) after the high-profile sales of Coutinho, Oxlade-Chamberlain, Lukaku and Walker respectively.

These sales helped Liverpool and Tottenham boost profits, Arsenal to turn a loss into a profit and helped Everton reduce a loss significantly.

The Premier League profit table looks a whole lot different without player sales. Although important to clubs, relying on player sales is not a true test of profitability as they large sales are not made every year, nor would fans want them to be (unless adequately replaced).

To work out the profits without player sales, we take the profit before tax and deduct the profits on player sales and we will ignore taxes for this analysis.

Interestingly, without player sales, Premier League clubs make a huge loss of £403m. It is worth noting here however that had clubs not sold players, they also wouldn’t have brought many. When players are brought, they experience an amortisation charge in each year of their contract.

Had these additional amortisation costs not been included, clubs would have still turned a profit on the assumption that the total fees spent of £1,833m on average contract length of 4 years, the amortisation this year would have been £458m, essentially meaning a profit of around £50m would have been recorded without transfers, around a fifth of the profits actually recorded.

Tottenham would have been way out in front even without transfers, recording a profit of £66m after another successful season was boosted by Wembley and Nike, while their costs remain way below the level of their rivals.

Huddersfield experienced the financial joys of promotion which accounted for the majority of their profits which would have still been £24m without transfers.

Brighton (£8m), Burnley (£14m), Liverpool (£1m), Manchester (£8m – due to not taking into account the taxes) and Newcastle (£19m) were the only other clubs to record a profit without player sales.

The largest loss would have been Everton, whose losses amounted to £101 without the sale of Lukaku and others.

Chelsea also benefitted hugely from players sales, recording a loss of £83m without them.

Arsenal (£50m), Crystal Palace (£38m), Leicester (£37m), Manchester City (£29m), Stoke (£52m), Swansea (£49m) and Watford (£35m) all recorded huge losses without players sales.

Summer ‘19

This year, there has been lack of high-profile player sales in the Premier League which will mean profits will be lower unless revenue rises significantly, or costs are lowered. Costs are unlikely to be on the decline with wages continuing to grow. Revenue from the Premier League will be similar to this year due to the League being in the final year of a 3-year cycle.

However, European performances have been huge this year and have concluded in an All English final in both the Champions League and Europa League, the first time this has happened. This should enhance profits of the top six and hence the Premier League as a whole.

On top of this, commercial revenue will continue to rise as the popularity of football and the ability to monetise this appears to have no bounds.

Outside of this, Burnley will have high profits once again after playing in the Europa League.

Watford and Leicester saw the high profile exits of Richarlison and Mahrez which should see large profits realised by both clubs.

As seen in the previous section, the likes of Arsenal, Crystal Palace, Stoke and Swansea all recorded huge losses without players sales and are likely to see large losses this season without them. Stoke and Swansea’s relegations mean that their losses will be large regardless of any sales.

It’s an interesting time for Premier League clubs who are all looking to become profitable and sustainable to a mixed degree of success due to the delicate balance of achieving your goals and spending prudently. The key is to spend smarter not more, something most clubs are yet to master.

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