Premier League clubs posted record revenues last season to book an aggregate pre-tax profit for only the second time this century.
Clubs in the top tier of English football made a combined pre-tax profit of £120m in 2014-15, according to business advisory firm Deloitte.
That sum was 37 per cent less than the £190m figure for 2013-14 but marks the first time Premiership teams have recorded two consecutive years of profit.
Revenues, which have risen sharply since 2013 when a new television deal boosted income, rose 3 per cent to a combined £3.4bn — a record.
Pre-tax profits are novel at Premier League clubs. Before the 2013 television deal, clubs made a combined pre-tax loss for 14 consecutive seasons.
“Football clubs have recorded systematic losses since the dawn of time,” said Stefan Szymanski, author of Money and Football. “This is largely because the promotion and relegation system promotes such intense competition and because owners derive status from investing in their club.”
But after years of losses, much of it absorbed by owners, clubs are booking profits. All but three clubs — Queens Park Rangers, Aston Villa and Chelsea — posted an operating profit last season, and Dan Jones, partner in the sports business group at Deloitte, believes it will be sustained.
“The perennial problem for Premier League clubs was to convert impressive revenue growth into profitability. We saw this problem solved with record-breaking results last year,” he said.
“With further significant revenue increases already guaranteed for the next broadcast cycle, starting in 2016-17, there is every reason to be confident of the Premier League clubs’ profitability being here to stay.”
Prof Szymanski agrees. “Now that the annual revenues of the Premier League are almost double that of their nearest financial rival [the Bundesliga in Germany], the English clubs can attract the best players and still have some money left over.
“The other European leagues are terrified about what is happening. The EPL is emerging as a dominant league . . . with the other European leagues becoming minor league feeders,” he said.
The analysis by Deloitte also reveals that wages for players and staff rose 6 per cent in 2014-15 to a total of £2bn across all 20 clubs — another record. For every £1 a club earns in revenues, 60p is spent on wages.
Deloitte will reveal more a more-detailed breakdown of clubs’ financial performance in June, but earlier this year it published an analysis of revenues at Europe’s top clubs. It revealed that the top 20 clubs recorded over €6.1bn in revenues and that nine English clubs featured in the top 20 “rich list”.